Tax News Daily
The latest tax news from around the world, summarised and tagged for tax professionals. Updated twice daily.
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FTO makes online hearings default for tax complaints
Pakistan's Federal Tax Ombudsman (FTO) has made online hearings the default format for handling tax complaints, marking a procedural shift in how taxpayer grievances are processed. This move aims to improve accessibility and efficiency in tax dispute resolution across the country, reducing the need for in-person appearances. The change represents a meaningful update to the tax controversy landscape in Pakistan, leveraging digital tools to streamline the complaints and hearing process for both taxpayers and FTO officials.
Multistate Tax Trends: SALT Litigator Zachary Milliken on Texas Franchise Tax Mistakes, AI Sales Tax Risks, Successful Dispute Resolution, and the Future of State Tax Audits
A SALT litigator discusses common mistakes in Texas franchise tax compliance, the emerging risks of using AI tools for sales tax determinations, and strategies for successful dispute resolution with state tax authorities. The interview covers practical insights on navigating multistate tax audits, including how auditors are evolving their techniques and what businesses should watch for. Key topics include Texas franchise tax apportionment errors, the reliability concerns around AI-generated sales tax advice, and best practices for managing state tax controversies before they escalate to litigation.
Administraciones tributarias de América Latina discuten sobre problemas y buenas prácticas en materia de gestión tributaria
Tax administrations across Latin America, coordinated through CIAT, convened to discuss challenges and best practices in tax administration management. The forum provided a platform for revenue authorities to share experiences on improving compliance, modernizing tax systems, and addressing common operational difficulties. Discussions likely covered areas such as digitalization of tax processes, taxpayer services, audit strategies, and inter-agency cooperation. Such regional exchanges aim to strengthen institutional capacity and harmonize approaches among Latin American tax authorities, contributing to more efficient revenue collection and improved taxpayer compliance across the region.
Kansas City Tax Preparer Sentenced to Prison for Two Financial Fraud Schemes
A Kansas City tax preparer has been sentenced to prison for two financial fraud schemes. The case involves fraudulent tax preparation activities, representing a tax compliance enforcement action by federal authorities. The sentencing underscores IRS and DOJ efforts to prosecute tax preparers who exploit clients or manipulate returns for personal gain. This serves as a reminder of criminal penalties available under U.S. tax law for preparers who engage in fraudulent conduct, including filing false returns or misappropriating client funds. The case highlights ongoing enforcement priorities targeting unscrupulous tax professionals operating in the personal income tax space.
EU tax authorities increase their focus on data quality
EU tax authorities are intensifying scrutiny on data quality as digital reporting and e-invoicing mandates expand across member states. Tax administrations are leveraging real-time transaction data, SAF-T filings, and e-invoicing streams to detect inconsistencies and trigger audits. Businesses face growing compliance risk if their VAT data, master data, and transactional records contain errors or mismatches. The article highlights that tax authorities are moving from periodic checks to continuous monitoring, placing greater pressure on companies to invest in data governance, tax technology, and automation to ensure accurate and consistent reporting across jurisdictions.
Supreme Court Upholds Allahabad HC Decision Describing GST Registration Cancellation as ‘Economic Death’ of Business
The Supreme Court of India has upheld an Allahabad High Court decision characterizing GST registration cancellation as the 'economic death' of a business. The ruling reinforces judicial protection for taxpayers facing arbitrary or disproportionate GST registration cancellations by tax authorities. The decision sets a significant precedent emphasizing that cancellation of GST registration effectively renders a business non-operational, preventing it from conducting lawful trade. Tax authorities must therefore exercise this power judiciously and with proper justification, strengthening the rights of registered taxpayers against undue administrative action under India's GST framework.
What French Accountants Will Actually Do All Day Under the E-Invoicing Mandate
Under France's upcoming e-invoicing mandate, accountants will shift from manual data entry and invoice processing toward higher-value advisory and analytical roles. The article explores how the automated exchange of structured invoice data through the Portail Public de Facturation (PPF) and certified partner platforms (PDPs) will free practitioners from routine compliance tasks. Instead, accountants will focus on data quality management, exception handling, client advisory services, and interpreting real-time financial data. The piece offers practical insight into workflow transformation under the French e-invoicing reform, which is a significant operational change for the accounting profession.
Inland Revenue Reconsults on a Range of “Current GST Issues”
New Zealand's Inland Revenue has opened a second round of consultation on several unresolved GST issues, revisiting proposals from an earlier discussion document. Topics under reconsideration include the GST treatment of certain financial services, mixed-use assets, and cross-border supplies. The reconsultation signals that Inland Revenue is refining its policy positions following earlier feedback from taxpayers and practitioners. This is a meaningful regulatory development for New Zealand businesses navigating GST compliance, particularly those involved in financial services or with complex supply arrangements that fall into grey areas under current rules.
Finance Act 2026 Reshapes VAT — Including Removing Imported Fishing Nets from the Exempt List
An unnamed country's Finance Act 2026 introduces several VAT changes, including the removal of imported fishing nets from the VAT exemption list, signalling a tightening of exemptions on goods imports. The act reshapes the broader VAT framework with multiple amendments affecting rates, exemptions, and the scope of taxable supplies. The fishing nets change illustrates how targeted sectoral adjustments are being made alongside broader structural reforms. Businesses engaged in importation and sectors previously benefiting from exemptions will need to reassess their VAT positions under the updated legislation.
Recodification of VAT into the CIBS Likely Postponed to 1 January 2027
The planned recodification of VAT rules into France's new Code des Impositions sur les Biens et Services (CIBS) is likely to be delayed from its originally anticipated timeline to 1 January 2027. The CIBS is a major legislative project to consolidate and modernise indirect tax law in France. The postponement gives businesses and practitioners additional time to prepare for the structural changes the recodification will bring, though the substantive law is not expected to change significantly. The delay reflects the complexity of integrating existing VAT provisions into the new code.
Tax Court Says CRA Must Honour Stale-Dated Input Tax Credits — The Ontario Tire Stewardship Win
Canada's Tax Court ruled in favour of Ontario Tire Stewardship, holding that the Canada Revenue Agency must honour input tax credits (ITCs) even where the claims were considered stale-dated. The CRA had sought to deny the ITCs on timing grounds, but the court found the credits were validly claimed within the applicable rules. The decision is significant for GST/HST registrants managing retroactive or delayed ITC claims, clarifying that procedural limitations cannot override substantive entitlements where the statutory conditions are met. The ruling reinforces taxpayer rights in ITC disputes with the CRA.
France VAT Exemption Threshold 2026
France is updating its VAT exemption thresholds for 2026, affecting small businesses operating below certain turnover limits. The exemption scheme allows qualifying businesses to avoid charging VAT on their sales, simplifying compliance obligations. The 2026 thresholds reflect adjustments relevant to both domestic French businesses and foreign companies supplying goods or services in France. Businesses must monitor their turnover carefully against these limits to determine registration obligations. Exceeding the threshold triggers standard VAT compliance requirements. This update is particularly significant for small enterprises and cross-border digital service providers assessing their French VAT exposure.
Luxembourg moves towards mandatory B2B e-invoicing
Luxembourg has announced plans to introduce mandatory B2B e-invoicing, with implementation targeted for 2028. The move aligns Luxembourg with the broader EU trend of adopting structured digital invoicing to combat VAT fraud and improve tax compliance. Businesses operating in Luxembourg will need to adapt their invoicing systems to meet the new requirements ahead of the deadline. The initiative follows similar mandates already enacted or planned in France, Germany, Belgium, and other EU member states, and is expected to drive significant investment in e-invoicing infrastructure and ERP system updates for companies active in Luxembourg.
Rajasthan Government Issues New Guidelines for GST Return Scrutiny
The Rajasthan state government has issued new guidelines governing the scrutiny of GST returns filed by taxpayers within the state. The guidelines establish structured procedures for tax officers to examine return discrepancies, mismatches between GSTR-1 and GSTR-3B filings, and input tax credit anomalies. The update aims to standardize enforcement and improve compliance monitoring across Rajasthan's GST administration. Practitioners and businesses operating in Rajasthan should review their return filing practices to ensure alignment with the enhanced scrutiny framework, as the guidelines signal increased administrative focus on identifying underreported liabilities and incorrect credit claims.
Suspicion Alone Cannot Justify Income Tax Additions: Supreme Court Upholds Deletion of ₹16.61 Crore Alleged Unaccounted Sales
India's Supreme Court upheld the deletion of a ₹16.61 crore income tax addition related to alleged unaccounted sales, ruling that mere suspicion without corroborating evidence cannot justify tax additions. The court reaffirmed that tax authorities must base assessments on concrete material rather than conjecture. This ruling reinforces evidentiary standards in income tax proceedings and limits the ability of assessing officers to make additions solely on the basis of suspicion, providing significant protection to taxpayers facing unsubstantiated assessments of undisclosed income.
Refund Cannot Be Denied for Mere Technical Lapse: ITAT Invokes Article 265 to Protect Taxpayer’s Rights
India's Income Tax Appellate Tribunal ruled that tax refunds cannot be denied solely due to technical lapses by the taxpayer, invoking Article 265 of the Indian Constitution, which prohibits collection of taxes without authority of law. The ITAT held that procedural non-compliance should not override substantive rights to refund where tax has been validly paid and the refund claim is legitimate. This decision strengthens taxpayer protections against arbitrary denial of refunds on technical grounds and has broad implications for refund proceedings across Indian income tax administration.
Breaking News: Supreme Court Upholds Gujarat High Court Verdict – No GST on Transfer of Long-Term Leasehold Rights of Industrial Plots
India's Supreme Court upheld a Gujarat High Court verdict ruling that the transfer of long-term leasehold rights over industrial plots is not subject to GST. The court determined that such transfers do not constitute a supply of goods or services under the GST framework, providing significant relief to businesses involved in industrial land transactions. The ruling clarifies the GST treatment of leasehold rights, which has been a contentious area, and sets a binding precedent affecting industrial plot transactions and similar long-term lease arrangements across India.
Malaysia Introduces e-Invoice Voluntary Disclosure Programme
Malaysia has introduced an e-Invoice Voluntary Disclosure Programme, offering taxpayers an opportunity to come forward and rectify non-compliance with the country's e-invoicing requirements. The programme reflects Malaysia's ongoing effort to enforce its mandatory e-invoicing rollout, which has been phased in since August 2024. By allowing voluntary disclosure, the Inland Revenue Board of Malaysia (LHDN) aims to encourage adoption and correct implementation of the e-invoice system while reducing penalties for those who proactively address gaps in compliance. This development is significant for businesses operating in Malaysia that are navigating the transition to mandatory e-invoicing.
Illinois Use Tax Versus Chicago Municipal Taxes: Digital Products and Services
Illinois use tax and Chicago municipal taxes create a complex dual-layer compliance environment for digital products and SaaS providers. Illinois imposes use tax on digital goods and services at the state level, while Chicago levies its own municipal taxes, including the Personal Property Lease Transaction Tax and Amusement Tax, on similar transactions. Businesses selling SaaS, streaming, or other digital services must navigate both regimes, which differ in scope, rates, and applicable exemptions. The overlap creates significant compliance challenges, particularly for out-of-state vendors determining nexus and taxability across these overlapping jurisdictions.
Madras HC: Govt. Contractors Eligible for Additional GST Reimbursement Following VAT-to-GST Transition
The Madras High Court has ruled that government contractors are entitled to additional GST reimbursement to compensate for the increased tax burden arising from the transition from VAT to GST. The court found that contractors who entered into agreements under the VAT regime and faced higher effective tax rates under GST are eligible for reimbursement of the differential cost from the government. This ruling has significant implications for public sector contracts and infrastructure projects entered into before GST implementation in 2017, clarifying the state's obligation to indemnify contractors against transition-related tax cost increases.
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