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EU - General Court of the EU Clarifies Timing Principle for Input VAT Deduction

The EU General Court has confirmed that input VAT deduction should not be delayed to a later period if the invoice is received before the VAT return is filed.

🔹 What changed
In case T 689/24, following questions referred by the Supreme Administrative Court of Poland, the General Court of the European Union assessed national rules that tie the timing of VAT deduction strictly to the date of invoice receipt, even where the taxable supply took place earlier, and the invoice arrived before the return was submitted.

🔹 Effective date
Judgment issued on February 11, 2026.

🔹 Who is impacted
Businesses operating in the European Union, especially those with VAT recoveries where invoices often arrive after period end but before filing, including
🔸 buyers and procurement heavy groups seeking to deduct input VAT in the period the supply took place
🔸 businesses in jurisdictions whose VAT practice follows a strict invoice receipt period approach, including Poland as the case origin
🔸 shared service centres and cross-border groups with high invoice volumes and tight month-end close timelines
🔸 tax and finance teams managing cash flow impact from delayed VAT recovery

🔹 Practical implications
🔸 Recheck your VAT close process: if invoices are received before filing, earlier period deduction may be defensible under the neutrality and proportionality principles highlighted by the Court
🔸 Update internal controls on invoice cut-off, evidence of receipt date, and audit trail, especially for high-value purchases
🔸 Review local guidance and dispute strategies, as tax authorities may need to adjust their approach beyond the domestic context of the case
🔸 Model cash flow impact: faster deduction can improve liquidity, but consistency and documentation will be key

Interested to learn more: https://eu1.hubs.ly/H0rZG9H0

💬 Could this judgment improve your VAT recovery timing, or do you expect pushback in practice? Share your view.

Saudi Arabia - VAT Guideline: Deemed Supplier Rules for Digital Marketplaces

Saudi Arabia has introduced deemed supplier rules that can shift VAT registration, invoicing, collection, and remittance obligations from sellers to digital marketplace operators.

🔹 What changed
Amendments to Saudi Arabia’s VAT Implementing Regulations issued by Zakat, Tax and Customs Authority reshape VAT collection for the e-commerce sector by treating certain platform operators as the supplier for VAT purposes when they actively facilitate a sale on behalf of underlying suppliers.

🔹 Effective date
The deemed supplier rules took effect on January 1, 2026.

🔹 Who is impacted
Businesses selling to customers in Saudi Arabia, especially
🔸 cross-border sellers, including nonresident suppliers selling through platforms where the deemed supplier rules apply
🔸 SaaS and digital service providers using digital marketplaces to reach Saudi customers
🔸 marketplace operators and platforms that actively facilitate sales, since VAT responsibilities can move to the operator
🔸 resident suppliers that are not VAT registered and sell through platforms, where the operator may become the deemed supplier (contractual opt-out arrangements may shift responsibility back to the supplier)

🔹 Practical implications
🔸 Confirm whether your platform activities meet the deemed supplier conditions, especially for nonresident digital services and resident nonregistered sellers
🔸 Update invoicing and recordkeeping, since the operator may need to issue VAT-compliant invoices and store VAT documentation
🔸 Review contracts and commercial flows, including opt-out clauses that can reallocate VAT responsibility between the marketplace and the seller
🔸 Align ERP, billing, and marketplace tooling to ensure VAT collection, filing, and remittance follow the deemed supplier model

Interested to learn more: https://eu1.hubs.ly/H0rZGHg0

💬 Are your current marketplace and seller onboarding processes ready for this shift?

Uzbekistan - Automatic VAT Assessment Tool Based on E-Invoicing

Uzbekistan has moved an AI-supported e-invoicing risk tool into production, and high-risk electronic invoices can now delay a buyer’s input VAT credit until the VAT is actually paid to the state budget.

🔹 What changed
Based on amendments to the Tax Code shared in November 2025 under a Presidential Decree introducing a new tax control system, the State Tax Committee of Uzbekistan launched an AI-supported risk assessment that evaluates electronic invoices in real time and assigns a color-coded risk level (low, medium, or high).

The tool is designed to increase VAT collection, penalize suppliers that collect VAT but fail to remit it, and raise buyer awareness when dealing with higher-risk sellers. The model also limits high-risk classification to no more than 10 percent of a taxpayer’s issued electronic invoices per reporting period.

🔹 Effective date
The risk assessment system moved into the production phase on January 1, 2026.

🔹 Who is impacted
Taxable persons in Uzbekistan who issue or receive electronic invoices, especially
🔸 VAT registered suppliers issuing VAT e-invoices (their invoices may be classified by risk level)
🔸 Purchasers claiming input VAT on received VAT invoices, since high-risk invoices are creditable only after VAT is paid to the state budget
🔸 Buyers using the tax agent mechanism to secure input VAT credits by paying VAT in advance when the invoice is high risk
🔸 Any business with material domestic procurement volumes where blocked or delayed input VAT credits can create cash flow pressure

🔹 Practical implications
🔸 From January 1, 2026, VAT on high-risk electronic invoices is credited only after remittance to the tax authority by the supplier or by the buyer acting as a tax agent
🔸 Strengthen counterparty checks, because the system shifts responsibility to transaction parties to evaluate who they trade with
🔸 Add controls to monitor invoice risk status and manage the potential loss or delay of input VAT credits
🔸 Update internal workflows (approvals, payment holds, supplier onboarding) to reduce exposure where invoices are flagged high risk

Interested to learn more: https://eu1.hubs.ly/H0rZDYZ0

💬Are your current processes ready for this shift, especially for multi-country sales?

Azerbaijan – New VAT Registration Portal for E-Commerce Suppliers

The National Assembly of Azerbaijan has approved, in its third reading, amendments introducing a new simplified VAT registration framework for non-resident suppliers of goods and digital services. The reform is designed to modernize VAT compliance for cross-border e-commerce and digital transactions.

The newly adopted rules establish a dedicated VAT registration system for foreign suppliers that make taxable supplies directly or indirectly to customers in Azerbaijan.

Key elements of the reform
🔸 Non-resident suppliers of goods or digital services exceeding an annual threshold of USD 10,000 must register for VAT
🔸 VAT registration must be completed within 30 days from the moment the threshold is exceeded
🔸 VAT returns remain due by the 20th day of the month following the reporting period
🔸 The VAT payment deadline is extended to the last day of the month following the reporting period
🔸 A six-month transition period is introduced to allow technical implementation of the new portal and supporting infrastructure

The reform signals Azerbaijan’s intention to strengthen oversight of cross-border digital and e-commerce transactions and to offer a structured, simplified registration pathway for non-resident suppliers.

Foreign businesses supplying Azerbaijani customers should assess their turnover and prepare to register under the new system once it becomes operational. Early preparation will help avoid late registration risks and potential penalties under the VAT framework.

Interested to learn more: https://eu1.hubs.ly/H0rV4GS0

💬 Are you supplying digital services or goods to customers in Azerbaijan and approaching the USD 10,000 threshold?
Have you reviewed whether your current VAT setup aligns with the upcoming registration portal requirements?

Philippines – VAT on Digital Services: Revenue Targets and Repeal Debate

The Bureau of Internal Revenue (BIR) recently confirmed it expects to collect approximately USD 360 million in VAT revenue under the Digital Services Act, which took effect in August 2025 following several postponements.
This projection highlights the fiscal importance of VAT on digital services for the Philippine state budget.

🔹 Revenue Authority Position
🔸 The BIR is strengthening its infrastructure to ensure efficient VAT collection from non-resident digital service providers
🔸 Continuous monitoring mechanisms are in place to track VAT registration, reporting, and payment compliance
🔸 With the introduction of a simplified VAT registration and reporting system, the BIR has made it clear that non-compliance will no longer be tolerated
The message from the tax authority is clear: digital platforms and overseas providers serving Philippine customers must fully comply with VAT obligations.

🔹 Simplified System = Fewer Excuses
The new framework provides:
🔸 Simplified VAT registration for non-resident providers
🔸 Streamlined reporting procedures
🔸 Clear remittance channels

From the BIR’s perspective, the administrative barriers that once complicated compliance have now been significantly reduced.

🔹 Political Pushback: Repeal Proposal
At the same time, political resistance is emerging.
🔸 A bill has been filed to repeal Republic Act No. 12023, which introduced VAT on digital services
🔸 The proposal argues that the tax is regressive and disproportionately affects SMEs, freelancers, online sellers, and domestic consumers
The repeal initiative raises an important fiscal question: can Parliament realistically remove a measure projected to generate hundreds of millions in revenue?

🔹 What Comes Next?
VAT on digital services is now in operation, revenue projections are significant, and enforcement is intensifying.
Whether the repeal proposal gains traction remains uncertain, particularly given the Act’s contribution to public finances.

Interested to learn more: https://eu1.hubs.ly/H0rV3jK0

💬 Do you believe VAT on digital services is a necessary modernization of tax policy, or does it disproportionately burden small digital actors?

Mexico – New Tax Withholding Rules for Digital Platforms (2026 Reform)

Mexico is entering 2026 with a strong push to modernize and tighten its digital economy tax framework. The Finance Bill 2026 introduces important updates that significantly expand the responsibilities of digital platform operators acting as intermediaries.

Effective January 1, 2026, platforms that facilitate third-party supplies must comply with stricter withholding and reporting obligations.

🔹 Income Tax (ISR) Withholding Changes
🔸 The withholding income tax rate for natural persons increases from 1% to 2.5%
🔸 A new 4% ISR withholding rate applies to legal persons that provide a valid RFC (tax registration number)
🔸 If a legal person fails to provide a valid RFC, the withholding rate jumps to 20%

🔹 VAT Withholding Framework
Digital platform operators must continue operating under a dual VAT withholding mechanism:
🔸 When the underlying seller provides a valid RFC, the platform withholds 50% of the VAT
🔸 If the RFC is missing, the platform must withhold 100% of the VAT amount

🔹 Expanded Reporting & Transparency Obligations
🔸 Platforms must submit detailed informative reports to the Mexican Tax Administration Service (SAT), including mandatory data on sellers and service providers
🔸 For non-resident suppliers, additional transaction-level and identification data must be provided
🔸 Platforms must establish a real-time online communication channel with SAT, ensuring direct access to transactional tax information

🔹 What This Means for Platforms
Digital platforms operating in Mexico are no longer just facilitators. They are central compliance actors responsible for:
🔸 Correct withholding logic
🔸 Verification of tax IDs (RFC)
🔸 Real-time data transmission
🔸 Expanded seller due diligence

The 2026 reform reinforces Mexico’s strategy to close tax gaps in the digital economy and increase revenue transparency.

Interested to learn more: https://eu1.hubs.ly/H0rTldL0

💬 Are your withholding systems, seller onboarding checks, and reporting tools aligned with Mexico’s 2026 digital platform rules?

The shift toward real-time tax supervision is accelerating. Preparation now can prevent costly penalties later.

France – Small Parcel Fee on E-Commerce Imports from 2026

🔸 France Moves Ahead with the “Small Parcel Tax”
On February 2, 2026, the French Parliament adopted the Finance Bill 2026. Under Article 22, the Bill introduces a new EUR 2 handling fee on low-value goods imported from outside the EU.
The measure is designed to address the rapidly increasing volume of small-value e-commerce imports and the administrative burden placed on customs authorities.

🔹 Timeline
🔸 Effective date: March 1, 2026
🔸 The fee will apply until the planned EU-wide customs handling fee becomes effective (currently scheduled for November 2026)
🔸 The Finance Bill still awaits final approval by the Constitutional Court before formal enactment

🔹 Scope of the New Measure
The small parcel fee should be understood as a customs management fee, not as customs duty or import VAT.
🔸 Applies to low-value consignments (below EUR 150)
🔸 Covers imports declared under the simplified H7 customs declaration
🔸 Charged EUR 2 per declaration line (per product classification)
🔸 Applies to all low-value imports from outside the EU, except certain listed transactions between mainland France and overseas departments
🔸 The person liable for reporting and paying the fee is the party responsible for remitting import VAT under the H7 declaration

This means that a parcel containing multiple product types will be charged separately for each classification line.

🔹 What This Means for E-Commerce
The measure primarily impacts:
🔸 Non-EU online sellers shipping low-value goods to French customers
🔸 E-commerce marketplaces facilitating such sales
🔸 Logistics operators handling simplified H7 declarations

This is not an isolated move. It is part of a broader EU-level shift toward tighter customs controls and reduced competitive advantage for low-value imports.

Interested to learn more: https://eu1.hubs.ly/H0rTgjd0

💬 Are your pricing models and customs processes ready for France’s March 2026 small parcel fee?

Now is the time to reassess your import flows, declaration structures, and VAT accountability framework.

Italy – Consolidated VAT Code: New Requirements for Taxable Persons

🔸 A Long-Awaited Reform Becomes Reality
Italy’s new Consolidated VAT Code has officially been published in the Official Gazette and will enter into full force on January 1, 2027.
After years of fragmented legislation and overlapping provisions, Italy is moving toward a single, unified VAT regime.

🔹 Why This Reform Matters
The Italian VAT framework has long been spread across multiple decrees, regulations, and interpretative guidelines. This consolidation aims to:
🔸 Simplify VAT interpretation and application for businesses
🔸 Align national rules more closely with the EU VAT Directive
🔸 Prepare Italy for future EU-wide reforms, including VAT in the Digital Age
🔸 Strengthen monitoring and digital tax controls

🔹 What Will Change for Taxable Persons?
The new VAT Code not only codifies existing rules. It also introduces new compliance mechanisms and structural updates, including:
🔸 New customs framework for exports
Less paperwork, clearer procedures, reduced risk of document manipulation, and improved classification of VAT-exempt transactions.
🔸 Unified e-invoicing and digital reporting rules
Issuance, transmission, receipt, and storage of e-invoices will be centralized within a single, coherent legal framework. Digital reporting for B2C transactions and retail daily reports will also fall under the Code.
🔸 Full synchronization of daily digital reports and pre-filled VAT returns
Retail businesses will see stronger integration between Z reports and VAT return preparation.
🔸 Updated VAT rates for certain supplies
Specified categories of goods and services will be subject to revised rates.
🔸 Simplified regulatory referencing
Businesses will have a single, searchable VAT framework rather than navigating multiple, scattered legal acts.

🔹 Stronger Monitoring Ahead
The reform enhances the Revenue Agency’s digital oversight capabilities, particularly in retail and e-commerce B2C sectors, reinforcing Italy’s move toward predictive and real-time compliance.

Interested to learn more: https://eu1.hubs.ly/H0rTghS0

💬 Is your Italian VAT setup ready for the 2027 transition? Now is the time to review your invoicing systems, export procedures, and digital reporting frameworks.

Germany – eBay Marketplace: Simplified Shipping Solution for Local Sellers

eBay has launched SpeedPAK for German merchants, introducing a streamlined international shipping option designed to make cross-border sales more predictable for both sellers and customers.

🔸 What SpeedPAK changes for cross-border shipping
🔹 A simplified shipping option for German sellers focused on international deliveries
🔹 Greater price transparency for customers at checkout
🔹 Clearer expectations on customs clearance and delivery timelines

🔸 All-in pricing at checkout
🔹 SpeedPAK enables customs-cleared shipping
🔹 The final amount shown to customers can include: import duties, shipping costs, and any applicable customs clearance fees
🔹 This reduces unpleasant surprises on delivery and improves customer trust

🔸 Operational flow for sellers
🔹 Select SpeedPAK as the shipping option when listing items
🔹 Purchase the shipping label directly through eBay
🔹 Drop off the parcel at a DHL drop-off point in Germany
🔹 After drop-off, Orange Connex (eBay’s logistics partner) manages the international transportation

🔸 Why this matters for sellers
🔹 Fewer disputes and returns caused by unexpected import costs
🔹 Faster and smoother customs processing compared to fragmented shipping methods
🔹 More confidence for international buyers, which can support higher conversion rates

Interested to learn more: https://eu1.hubs.ly/H0r4-xk0

💬 Do you think all-in pricing and customs-cleared delivery will become the new standard for marketplace shipping in 2026?

World – Cross-Border E-Commerce Marketplace Leaders 2025

The global cross-border e-commerce landscape has shifted dramatically. Just three years ago, Temu accounted for barely 1% of cross-border e-commerce sales. Fast-forward to 2025, and Temu now shares the top position with Amazon in terms of cross-border sales volume.

🔸 What the data shows
🔹 Temu’s rise from niche player to global leader has been exceptionally fast
🔹 2025 figures place Temu alongside Amazon for cross-border sales volume
🔹 Insights are supported by a comprehensive survey from International Post Corp

🔸 How this growth happened
🔹 Strong reliance on de minimis thresholds in major markets
🔹 Simplified customs procedures and fast clearance
🔹 Extremely competitive pricing and rapid product availability
🔹 Limited regulatory oversight in several jurisdictions during the early growth phase

🔸 Why the outlook for 2026 is less certain
🔹 Abolition of the de minimis threshold in the US
🔹 Introduction of handling fees in multiple EU countries
🔹 Upcoming EU fixed parcel customs levy for low-value imports
🔹 Increasing scrutiny from tax and customs authorities

🔸 What changes for marketplaces and sellers
🔹 VAT compliance frameworks will need reassessment
🔹 Logistics and warehousing strategies may shift toward local or regional models
🔹 Pricing structures will likely change to absorb new customs and tax costs
🔹 Demand for specialised tax and compliance advisory support will increase

The era of friction-free, low-value cross-border e-commerce is clearly ending. As regulatory pressure intensifies, marketplaces and third-party sellers must adapt quickly to remain competitive and compliant.

Interested to learn more: https://eu1.hubs.ly/H0r4CPh0

💬 Do you expect Temu and similar platforms to maintain their momentum in 2026, or will tax and customs reforms reshape global e-commerce leadership?

Nigeria – VAT on Digital Financial Services from January 19, 2026

Nigeria is taking another decisive step in strengthening its digital economy tax framework. From January 19, 2026, banks and other financial institutions will be required to collect and remit VAT at 7.5% on specific digital financial services, in accordance with a Directive issued by the Federal Government.

🔸 What is changing
🔹 VAT at 7.5% will apply to selected electronic and digital banking services
🔹 The tax is charged on banking fees, not on the transferred or underlying transaction amount
🔹 Financial institutions are responsible for collecting and remitting the VAT

🔸 Services in scope
🔹 Fees for online and electronic bank transfers
🔹 Other designated digital financial and e-banking services
🔹 VAT applies strictly to the service fee element

🔸 Policy background
🔹 Nigeria continues to expand its digital economy tax framework
🔹 Digital services taxation is a core pillar of recent VAT reforms
🔹 The goal is to align traditional and digital service taxation and reduce revenue leakage

🔸 Impact on non-resident digital service providers
🔹 Payments from Nigerian customers may be subject to additional local charges
🔹 VAT obligations may apply alongside other indirect taxes or surcharges borne by customers
🔹 Pricing models should factor in both VAT and banking-related charges

🔸 What businesses should do now
🔹 Review payment flows involving Nigerian customers
🔹 Assess the indirect tax impact on digital and financial service pricing
🔹 Update customer communications and pricing transparency

As Nigeria continues to refine its digital tax framework, early awareness and pricing adjustments will be critical for both domestic and cross-border digital service providers.

Interested to learn more: https://eu1.hubs.ly/H0r4DQ70

💬 How will this VAT change affect your digital payments or pricing strategy in Nigeria? Are you already preparing for the January 2026 transition?