Tax News Daily
The latest tax news from around the world, summarised and tagged for tax professionals. Updated twice daily.
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Guidance: Report Pillar 2 top-up taxes: service availability and issues
HMRC publishes service availability and known issues updates for the Pillar 2 top-up taxes reporting service in the UK. This guidance page provides real-time status information for multinational groups required to file Pillar 2 top-up tax returns, covering planned maintenance windows, unplanned outages, and workarounds for technical problems. It supports large multinationals navigating the UK's implementation of the OECD global minimum tax rules, ensuring filers are aware of any disruptions to the digital submission service and can plan their compliance activities accordingly.
Bowling and the Refusal to Apply the 10% Reduced VAT Rate
This article discusses a dispute over whether bowling qualifies for a reduced 10% VAT rate, with tax authorities refusing to apply the lower rate to bowling activities. The case examines the classification of bowling as a sporting or leisure activity under VAT rules and whether it meets the criteria for reduced-rate treatment. The analysis explores the legal and administrative reasoning behind the refusal, relevant case law, and the broader implications for leisure and sports businesses seeking to benefit from reduced VAT rates across applicable jurisdictions.
Justification of Subcontractor Status for the VAT Reverse Charge on Construction Subcontracting
This article addresses the requirements for justifying subcontractor status in the context of the VAT reverse charge mechanism applicable to construction subcontracting. It examines what documentation and evidence businesses must provide to demonstrate that a supplier qualifies as a subcontractor, thereby triggering the reverse charge and shifting VAT liability to the recipient. The piece covers relevant administrative and judicial guidance, common compliance pitfalls, and the consequences of incorrectly applying or failing to apply the reverse charge in construction sector transactions.
Application of VAT to Furnished Accommodation Involving a Third-Party Hotel Service Provider
This article analyzes the VAT treatment of furnished accommodation where a third-party hotel service provider is involved in delivering the service. It explores how tax authorities determine whether the accommodation provider or the intermediary hotel operator is liable for VAT, and how the nature of the contractual arrangement affects VAT obligations. Key issues include principal versus agent distinctions, the application of hospitality VAT rules, and how the involvement of a third-party operator can alter the VAT supply chain and compliance responsibilities for property owners and operators.
Court – Evidence Justifying Involvement in a VAT Fraud Circuit
A court ruling examines the evidentiary standards required to establish a taxpayer's involvement in a VAT fraud circuit. The case addresses what constitutes sufficient evidence to implicate a business in carousel or missing trader fraud schemes, where VAT is charged but not remitted to tax authorities. The judgment is significant for businesses seeking to demonstrate good faith and due diligence in their supply chains, as well as for tax authorities pursuing VAT fraud recovery. The ruling clarifies the burden of proof and the type of documentary or circumstantial evidence courts will accept when determining complicity or negligence in VAT fraud arrangements.
Norway: Mandatory e-invoicing and digital bookkeeping approved
Norway has approved mandatory e-invoicing and digital bookkeeping requirements, marking a significant step in the country's tax digitalization efforts. The legislation establishes compulsory electronic invoicing standards for businesses operating in Norway, alongside requirements for digital bookkeeping practices. This move aligns Norway with broader European trends toward mandatory e-invoicing to improve VAT compliance, reduce fraud, and streamline tax administration. Businesses will need to adapt their accounting systems and processes to meet the new regulatory requirements. The mandate represents a major compliance consideration for both domestic Norwegian companies and foreign businesses operating within the country.
North Macedonia Launches Third Phase of E-Invoice Project
North Macedonia has launched the third phase of its national e-invoicing project, marking a significant step in the country's digital tax administration transformation. This latest phase expands the mandatory electronic invoicing framework, building on earlier rollouts and broadening the scope of businesses and transactions covered. The initiative aims to improve VAT compliance, reduce tax evasion, and align North Macedonia's invoicing infrastructure with broader regional and EU-adjacent standards. Authorities are working to integrate the e-invoice system with existing tax reporting obligations, enhancing real-time visibility for the tax administration over business transactions.
Romania Updates RO e-Invoice Rules for B2C Transactions
Romania has issued updated rules for its RO e-Invoice system specifically governing business-to-consumer (B2C) transactions. The amendments expand the scope of the mandatory electronic invoicing framework beyond B2B dealings, requiring businesses to issue structured digital invoices for consumer sales through the national RO e-Invoice platform. The changes reflect Romania's broader push to digitise tax reporting and reduce the VAT gap. Businesses operating in Romania must now ensure their billing systems comply with the updated B2C requirements, including proper formatting and timely submission of invoice data to the Romanian tax authority, ANAF.
Kazakhstan Launches Pre-Filled VAT Return Service for Form 300.00
Kazakhstan's tax authority has introduced a pre-filled VAT return service for Form 300.00, streamlining the compliance process for VAT-registered businesses. The service automatically populates return data based on information already held by the tax administration, including data from electronic invoices and prior filings. This initiative aims to reduce administrative burdens, minimise filing errors, and improve overall VAT compliance rates. Taxpayers will be able to review, adjust, and confirm pre-filled data before formal submission. The move reflects Kazakhstan's ongoing investment in digital tax administration tools and its efforts to modernise its tax infrastructure.
Invoice in KSeF and Visualization: The Tax Office Threatens with Double VAT
Poland's tax office has warned businesses that discrepancies between invoices submitted through the KSeF (Krajowy System e-Faktur) mandatory e-invoicing platform and their visual representations to recipients could trigger double VAT liability. The authority is scrutinising cases where the structured XML invoice data in KSeF differs from the PDF or printed version shown to customers, treating the visual document as a separate invoice. This creates a risk that VAT is effectively charged twice on the same transaction. The warning highlights critical compliance obligations for Polish businesses as KSeF mandatory implementation approaches.
India’s New Safe Harbour Rules Are Prompting a Reassessment of Transfer Pricing Strategies
India's updated safe harbour rules are reshaping how multinational companies approach transfer pricing strategies. The revised framework provides taxpayers with greater certainty by allowing eligible entities to adopt predetermined margins, reducing the risk of disputes with tax authorities. Companies are reassessing their intercompany pricing arrangements to determine whether opting into the safe harbour regime offers administrative simplicity and reduced litigation exposure. The rules impact sectors including IT services, knowledge process outsourcing, and contract R&D. Tax professionals are evaluating trade-offs between safe harbour margins and arm's length pricing outcomes to optimise compliance posture and manage audit risk effectively.
The European Court of Human Rights has upheld the weaponisation of privacy to restrict tax authorities’ access to banking data
The European Court of Human Rights (ECHR) has ruled in favor of using privacy rights to limit tax authorities' access to banking data, a decision criticized by tax justice advocates as enabling tax evasion and financial secrecy. The ruling is seen as a significant setback for efforts to improve tax transparency and cross-border information exchange. Critics argue the decision effectively weaponizes human rights law to shield wealthy individuals and entities from legitimate tax enforcement, undermining automatic exchange of financial information frameworks and the broader global push for tax authority access to beneficial ownership and banking records.
Australia: Draft GST guidance issued on cross-border supplies
The Australian Taxation Office has issued draft GST guidance addressing cross-border supplies of goods and services. The guidance clarifies how Goods and Services Tax applies to transactions involving non-resident suppliers and Australian consumers, covering areas such as digital services, intangibles, and imported goods. This draft guidance aims to provide clearer compliance direction for businesses engaged in cross-border trade with Australia, helping them determine GST obligations, registration requirements, and the correct treatment of various supply types. Businesses operating internationally with Australian customers should review the draft guidance and consider submitting feedback during the consultation period.
Early Review of Tax Affairs Essential for Compliance
An early review of tax affairs is highlighted as essential for compliance in South Africa, with the South African Institute of Tax Professionals (SAIT) emphasizing proactive engagement with tax obligations. The article underscores the importance of taxpayers reviewing their financial and tax positions ahead of deadlines to avoid penalties and interest from SARS. Timely compliance reduces audit risk and ensures accurate reporting. The guidance is particularly relevant for individuals and businesses navigating complex tax rules, encouraging them to work with qualified tax practitioners to identify exposures and rectify discrepancies before SARS intervenes.
Your ONESOURCE platform just got smarter
Thomson Reuters announces enhancements to its ONESOURCE platform, a leading tax compliance and management software suite. The updates aim to improve functionality and intelligence across the platform, helping tax professionals manage compliance workflows more efficiently. ONESOURCE serves corporate tax, indirect tax, and transfer pricing functions, and the new capabilities leverage technology to streamline data handling and reporting. The article highlights how the platform improvements support tax departments in managing increasing regulatory complexity and workload demands.
She cleans your house but the tax system can’t see her
This article examines how informal and domestic workers — such as house cleaners — remain largely invisible to tax systems, particularly in economies where cash-in-hand arrangements are common. It explores the structural failures of tax policy in capturing informal labor income, the implications for tax equity and revenue collection, and the disproportionate burden placed on formal workers. The piece highlights how personal income tax systems are ill-equipped to address the shadow economy of domestic work, and calls for reforms to bring informal workers into the tax base while protecting their rights and economic vulnerability.
Trust Tax Compliance Under Increased SARS Scrutiny
SARS has intensified scrutiny of trust tax compliance in South Africa, signaling a crackdown on trusts used for tax planning or income splitting. The South African Institute of Tax Professionals (SAIT) notes that SARS is closely examining trust structures, beneficial ownership disclosures, and whether distributions are correctly taxed in the hands of beneficiaries. Trustees and tax practitioners are urged to ensure accurate reporting of trust income, capital gains, and loans. Non-compliance risks include penalties, interest, and potential reclassification of trust transactions. The increased focus reflects broader SARS efforts to close tax gaps through targeted enforcement.
Tax Deduction Claims Under Scrutiny as SARS Tightens Compliance
SARS is tightening compliance around tax deduction claims in South Africa, increasing scrutiny of expenses claimed by individuals and businesses. The South African Institute of Tax Professionals (SAIT) warns that deductions lacking proper substantiation, such as home office expenses, travel allowances, and business costs, are under heightened review. Taxpayers must ensure claims are supported by accurate records and meet legislative requirements. SARS is leveraging data matching and third-party information to identify discrepancies. Non-compliant deductions face disallowance, penalties, and interest. Practitioners are advised to guide clients on maintaining documentation and submitting defensible, accurate returns.
EU – VAT Compliance Under OSS, IOSS and Local Registration Rules
This article examines EU VAT compliance options for businesses selling goods and services across EU member states, comparing the One-Stop Shop (OSS), Import One-Stop Shop (IOSS), and local VAT registration regimes. It outlines when each mechanism applies, eligibility criteria, and the administrative obligations involved. OSS simplifies multi-country VAT reporting through a single return, while IOSS covers low-value imported goods. Local registration remains necessary in certain scenarios. The guide helps businesses determine the most appropriate compliance route based on their sales model, transaction types, and customer base, reducing the risk of non-compliance across the EU's complex VAT landscape.
VAT Headaches: Overcharged VAT When Invoices Apply a Higher VAT Rate Than Legally Required
This article examines the VAT compliance issue of overcharged VAT, where invoices apply a higher VAT rate than legally required. It explores the legal implications for both suppliers and customers, including whether the incorrectly charged VAT must still be remitted to tax authorities, the customer's right to deduct input VAT, and the mechanisms available to correct such errors. The piece highlights the tension between VAT invoice obligations and the principle that VAT should reflect the correct legal rate, offering practical guidance for businesses dealing with over-invoiced VAT situations.
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