BDO Indirect Tax News

• Belgium: The government has confirmed that non-established entities registered for VAT in Belgium will fall outside the scope of the domestic e-invoicing measures. B2B e-invoicing will be mandatory as from 1 January 2026.
• Bulgaria: The mandatory VAT registration threshold dropped from BGN 166,000 to BGN 100,000 effective 1 April 2025. The tax authorities have clarified that taxable persons established in Bulgaria must register for VAT purposes if their taxable turnover reaches or exceeds BGN 100,000 within any consecutive 12-month period before 1 April 2025.
• Cambodia: The Ministry of Economy and Finance announced on 22 January 2025 that the e-invoicing system—a central repository and platform for the creation, management and validation of e-invoices—is being launched, with the ministry responsible for operation of the system.
• Canada: The harmonised sales tax (HST) rate on supplies made in Nova Scotia dropped from 15% to 14% on 1 April 2025 (click here for an analysis of the rate change by BDO in Canada).

The government announced plans on 21 March to support workers and businesses affected by the US tariffs. To support businesses, the Canada Revenue Agency has offered a temporary deferral of GST/HST remittances and corporate income tax payments from 2 April to 30 June 2025 and offering interest relief.

• Chile: Based on a resolution published 7 April 2025, as from 1 September 2025, sellers of goods valued at more than 135 UF (Chilean Unit of Account) to purchasers that are not VAT-registered will be required to issue invoices identifying buyers by their full name, tax ID, the method of payment and a description of the purchased goods, with penalties applying for noncompliance.

Starting 1 May 2025, certain taxpayers will be required to produce a physical copy of e-invoices and the certificate of payment on sales and services to final consumers.

• China: FAQs published by the tax authorities in February 2025 contain their technical position on the VAT treatment of the sale of carbon emission permits and certified emission reductions that are traded on China’s mandatory and voluntary carbon markets, respectively. A separate set of FAQs addresses the VAT treatment of transactions relating to EV charging and battery swapping. 
• Colombia: The National Tax Authority issued a ruling on 11 February 2025, which clarifies that service exporters must be registered as exporters in the Unique Tax Registry to qualify for the VAT exemption.
• Djibouti: An environmental protection contribution on imported or domestically produced plastic bottles or preforms intended for bottling mineral water or carbonated water with or without added sugar or other sweeteners applies as from 1 January 2025. The contribution is DJF 5 and there are no exemptions.
• Dominican Republic: Foreign digital service providers are required to collect and remit VAT on services used in the Dominican Republic, according to a decree made public on 28 February 2025. Covered providers must register with the Dominican tax authorities within 90 days from 22 July 2025 (the effective date of the decree) and submit monthly tax declarations through a dedicated interface to be created by the authorities.
• Ecuador: In a resolution dated 8 April 2025, the Foreign Trade Committee temporarily reduced the import tariff on light vehicles originating from the US to 10% in response to the universal tariff imposed by the US on Ecuadorian exports. The resolution is effective as from 10 April and will apply through 31 December 2025.
• Estonia: On 4 February 2025, the European Commission granted a request by Estonia to extend the 50% VAT deduction for the purchase and lease of passenger cars (including certain expenses) for another three years. The measure was due to expire on 31 December 2024; it now will apply through the end of 2027.
• European Union: The European Commission announced on 10 April 2025 that it is suspending EU countermeasures for 90 days in response to President Trump’s decision to pause the reciprocal tariffs for 90 days (see below under “US). EU member states had approved the first set of countermeasures against the US in response to the US tariffs on steel and aluminium from the EU on 9 April. A 25% tariff on a broad range of US products would have kicked in on 15 April, with a second tranche of products subject to the tariff starting on 15 May. The EU will continue to work on its countermeasures during the 90-day reprieve period and these will become effective if negotiations are not successful.

The European Commission announced on 28 March 2025 that importers (and any customs representatives) of carbon-intensive goods into the EU can begin using an online portal to apply for the status of authorised CBAM declarant in order to be able to import CBAM goods as from 1 January 2026 (for prior coverage, see the article in the October 2023 issue of Indirect Tax News). A request for CBAM declarant status must be made for an importer to continue importing carbon-intensive goods after 31 December 2025. 

A report released by the European Court of Auditors on 24 March concludes that loopholes and inconsistences in the EU simplified import customs procedures impede the identification and prevention of VAT fraud. They recommend that standardised rules be introduced and enforced.

• Finland: The government announced on 4 March 2025 that the plans to increase the VAT rate on sweets and chocolate from 14% to 25.5% are being scrapped due to criticism received during the public consultation. The rate change was expected to apply as from 1 June 2025. 
• France: The government issued a press release announcing that the reduction of the VAT exemption threshold for small businesses to EUR 25,000 is being delayed until 1 June 2025. The new threshold was slated to apply as from 1 March 2025.
• Iceland: The tax authorities launched online applications for new VAT registrations and re-registrations on 28 March 2025.

The tax authorities posted updated guidance on the deadlines and manner of reporting income derived from digital platforms. Operators of digital platforms that facilitate transactions for the sale of goods and/or services and the rental of real estate and movable property are required to provide information to the Iceland tax authorities or the relevant tax authority within the European Economic Area starting on 1 January 2025. As set out in a regulation published on 30 December 2024, platform operators must notify Revenue and Customs of their platform within eight days from the date the regulation became effective or eight days from the date the digital platform opened. A special form is used for the notification and the deadline for submitting reports for income distributed to sellers in 2025 is 20 January 2026.

• India: The government has initiated talks about a trade deal with the US following the imposition of a 26% tariff on US imports from India. India does not plan to introduce retaliatory tariffs on the US. Additionally, the Indian finance minister announced on 25 March 2025 that, as part of amendments to the 2025 finance bill, the government plans to abolish the 6% tax on digital advertisements effective 1 April. The levy has applied since 2016 to online advertisement services offered by certain nonresident providers.
• Ireland: The reduced VAT rate of 9% on gas and electricity—which was due to revert to 13.5%—will be applied for an additional six months to 31 October 2025. This was confirmed by the government in a press release issued on 1 April 2025.
• Ivory Coast: E-invoicing is mandatory for B2G, B2B and B2C transactions as from 10 January 2025, with a phased-in rollout for various taxpayers.
• Korea (ROK): A series of VAT support measures for businesses were announced on 3 April 2025, including the extension of filing and payment deadlines.
• Lithuania: The government has proposed a gradual increase in the VAT registration threshold from EUR 45,000 to EUR 85,000 as follows: to EUR 60,000 in 2026, EUR 70,000 in 2027 and EUR 85,000 in 2028. If adopted, the new measures would apply as from 1 January 2026.
• Malta: The Tax and Customs Administration have issued guidance on the special VAT scheme for SMEs.
• Nigeria: In a 26 March 2025 posting on X, the customs service announced a two-year exemption from import duty and VAT on the import of raw materials for the production of pharmaceutical products by manufacturers recognised by Nigeria’s Federal Ministry of Health and Social Welfare that have a valid tax identification number.

The House of Representatives has rejected the proposal to increase the standard VAT rate from 7.5% to 12.5% in 2026. The pilot phase for an e-invoicing system is expected to launch in July 2025 and the tax authorities have identified certain large taxpayers to participate.

• Norway: The parliament has adopted the government's proposed amendments to the Tax Administration Act. A proposal to implement the OECD's Digital Platform Information (DPI) standard into Norwegian law and introduce new expanded reporting obligations for digital platforms that facilitate the rental of real estate and transport equipment, and the sale of services was adopted by parliament on 4 April. Once enacted, the measures will apply as from 1 January 2026, with the first reporting due in 2027.

The tax authorities posted a decision of the appeals board on 2 April 2025, which clarifies the VAT treatment of services related to a marketplace for crowdfunding and for the secondary trading of shares. The board concluded that the taxpayer’s services relating to arranging share issues and the marketplace for secondary trading should be considered the provision of financial services, which are VAT exempt.

• Poland: The Ministry of Finance confirmed on 31 March 2025 that e-invoicing will become effective on 1 February 2026 for large businesses with turnover exceeding PLN 200 million and 1 April 2026 for all other taxpayers even though further revisions to the e-invoicing legislation are expected to be submitted to the Council of Ministers some time in 2025.
• Portugal: A decree law published on 24 March 2024 implements the EU VAT rules for SMEs into domestic law. Among other things, these rules allow a taxable person established in another EU member state to benefit from the VAT registration exemption for small businesses in Portugal if their annual turnover in Portugal does not exceed EUR 15,000 (from 2025) and their annual turnover in the EU does not exceed EUR 100,000.
• Rwanda: Parliament approved a draft law on 17 March 2025 introducing an environmental levy of 0.2% on imported consumer goods packed in plastic materials. The law still must be approved by the president and published in the official gazette.
• Saudi Arabia: On 21 March 2025, the Zakat, Tax and Customs Authority (ZATCA) announced the criteria for determining the 22nd wave of targeted taxpayers for the implementation of e-invoicing. Taxpayers selected for this round are those with revenue exceeding SAR 1 million during 2022, 2023 or 2024. Such taxpayers must ensure that their e-invoicing solutions are integrated into the government platform by 31 December 2025.
• Singapore: The Inland Revenue Authority of Singapore has published two updated e-Tax Guides on recordkeeping requirements: one for GST-registered taxpayers and one for non-GST-registered taxpayers.
• Slovakia: The government has initiated a project to develop an environment for e-invoicing in preparation for the introduction of mandatory e-invoicing for B2B transactions.

The tax authorities have updated their FAQs on the financial transaction tax that has applied since 1 January.

• South Africa: Budget 2025 approved on 2 April 2025 includes an increase in the standard VAT rate from 15% to 15.5% as from 1 May 2025 and to 16% as from 1 April 2026. The budget still requires certain steps to be taken before it is enacted.
• Spain: The tax authorities have clarified the VAT rate on bread, and the Supreme Court issued a decision on 28 January 2025 in a case involving the application of the reduced VAT rate to the delivery of a home, concluding that the absence of a certificate of habitability or an occupancy license does not automatically preclude the application of the reduced VAT rate for the transfer of new homes.
• Switzerland: The Federal Council issued a press release on 3 April 2025 that addresses the impact of US tariffs on Swiss exports. Under the US tariffs, all Swiss goods exports will be subject to a 31% tariff (now presumably on pause for a 90-day period). The Swiss government is planning discussions with U.S. authorities to work towards a solution and it currently does not have any plans for countermeasures.
• Taiwan: On 7 April 2025, the Ministry of Finance announced an increase in the registration threshold for foreign e-commerce operators that do not have a fixed place of business in Taiwan but sell services electronically to resident individuals. Effective immediately, the annual sales threshold triggering registration for such operators jumped from TWD 480,000 to TWD 600,000.
• Turkey: The minimum amount required for a VAT refund (based on a reduced rate or an exemption) increased from TRY 2,000 to TRY 10,000 effective 1 April.
• United Kingdom: The tax authorities have sent letters to businesses and individuals suspected of suppressing sales to lower their tax burden to fully disclose their income before penalties are imposed. Undeclared sales must be reported within 30 days of receipt of the letter.

The government launched a consultation in February on the proposed move towards mandatory e-invoicing in the UK. UK changes are likely to be introduced in stages, possibly impacting only certain sectors initially.

• United States: On 9 April 2025, President Trump announced that, effective immediately, the tariffs on China are increased to 145% (from 104%). He also announced a 90-day “pause” on higher tariffs for 75 countries that have not retaliated (although the precise countries are not identified), during which time only a 10% tariff will apply (Canada and Mexico are not covered by the 10% tariff). The situation is evolving and BDO will provide updates as needed.