- Iman Deschâtres
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Geopolitics is rapidly reshaping VAT and indirect tax rates. Countries across Europe, including Spain, Cyprus and Poland, and further afield in Vietnam, Cambodia, the Philippines, Zambia and Argentina, are introducing temporary indirect tax cuts to cushion the impact of ongoing conflicts. These reductions are typically focused on fuel, and in some cases food and other essentials.
These VAT reductions have an immediate effect felt by consumers, but the consequences extend further. Governments absorbing these cuts are forgoing revenue that will need to be recovered down the line. For businesses, the challenge is equally pressing: rate changes must be reflected in systems quickly and accurately. These measures, while broadly welcome as a response to inflationary pressures, introduce real complexity and uncertainty.
Against this backdrop, now is a critical moment to examine how well your tax management approach and processes are equipped to respond to rapid, large-scale change.
This is a glimpse of what caught my attention…and as you read the plethora of changes and consider the challenges they present especially to marketplaces and their sellers, keep in mind that only the right system can enable growth and open new markets without financial or reputational risk. Of course, I note that any observations and comments are solely my own opinion and view, and not intended to be the provision of advice. You should not rely on these without checking with your own tax, legal and financial advisors.
EU
The EU recently approved its long-awaited customs reform. The new framework encourages the operation of EU warehouses, with qualifying shipments benefiting from reduced handling fees.
Platforms facilitating distance sales from non-EU countries will be treated as importers, obliged to provide customs authorities with all necessary data, pay or guarantee any charges, and ensure goods comply with EU law.
A platform can have no warehouse, no logistics, no physical contact with the goods, and still carry full customs liability.
Morocco
Morocco has published Decree No. 2-25-862 implementing VAT obligations for non-resident digital service providers, with the rules taking effect six months after publication in the Official Bulletin (we understand the publication was on 18 December 2025, meaning the effective date is expected around 18 June 2026). Non-resident providers must register on a dedicated platform, obtain a Moroccan tax ID, collect 20% VAT on B2C sales, and maintain transaction records for ten years. The DGI is still to publish draft guidance, a simplified return format and a registration portal, meaning businesses have a short window to prepare once those tools become available.
India
Food delivery platforms are liable for the GST on food orders placed through their apps. However, restaurants still need to report those sales in their own GST returns.
European Court of Justice
On 3 March 2026, the CJEU (Case C-472/24, Žaidimų valiuta) confirmed that the resale of in-game gold is subject to VAT and does not qualify for the VAT exemption applicable to currency transactions. VAT therefore applies to the full consideration received, not merely to the margin.
Malawi
As part of its 2026/27 Budget Policy Statement delivered on 27 February 2026, Malawi intends to introduce VAT on digital services supplied by foreign companies to Malawian users. The measure targets services such as streaming, music, online advertising and software or app downloads, with platforms like Netflix, Facebook and YouTube cited as examples. The stated aim is to level the playing field between foreign digital providers and local businesses. A bill detailing the operational framework is expected to be presented to Parliament.
Togo
Togo’s 2026 Finance Law introduces VAT rules for digital services supplied by foreign providers, with VAT to be collected by the intermediary facilitating the transaction.
However, the law does not specify how non-resident suppliers should register or comply.
No clear go-live date or practical guidance has been issued yet, with further details expected through a ministerial decree.
Congo
The Republic of the Congo (Brazzaville) requires non-resident suppliers of digital services to register, collect, and remit VAT at an effective rate of 18.9% (18% VAT plus a 5% surtax), for both B2B and B2C transactions, with no registration threshold. The registration portal is open ahead of the July 2026 enforcement date.
Azerbaijan
Azerbaijan adopted amendments to its VAT legislation on 23 February 2026, introducing mandatory VAT registration and collection obligations for nonresident providers of electronic services supplied to B2C customers in Azerbaijan, effective 23 August 2026. Registration becomes compulsory within 30 days of annual gross sales to Azerbaijani customers exceeding the equivalent of US$10,000, with certain services such as consulting, legal, and real-time educational services excluded from scope.
Low Value Goods
The following trend is accelerating, low-value goods exemptions are being phased out, while new levies on small parcels are emerging.
Italy
Italy postponed its planned €2 fee on non-EU parcels valued below €150 until 30 June 2026, after the measure backfired: e-commerce operators simply rerouted cargo flights to other EU countries to avoid the charge, depriving Italian logistics hubs of significant volumes. The delay conveniently aligns Italy with the EU-wide €3 flat customs duty on small parcels, which takes effect from 1 July 2026.
Ukraine
On 30 March 2026, Ukraine’s Cabinet of Ministers approved a draft law to abolish the current VAT exemption for international parcels valued below €150, with VAT to be collected at the point of purchase through electronic platforms, in line with EU practice. An exemption is maintained for non-commercial shipments between private individuals valued below €45, and the changes are planned to take effect from the beginning of 2027, as part of Ukraine’s obligations under its IMF cooperation programme.
Thailand
Thailand abolished its de minimis exemption for low-value imported parcels on 1 January 2026, subjecting all goods to both import duties and 7% VAT regardless of value, directly targeting the flood of low-cost imports from platforms such as Temu, Shein and Lazada. Early results show the measure is working as intended: imported parcel volumes have already dropped and the new duties are generating approximately THB 300 million in additional revenue per month, with the government projecting over THB 3 billion annually.
Enforcement
Italy
Milan prosecutors have requested a criminal trial against Amazon’s European unit and four of its executives over alleged VAT evasion of approximately €1.2 billion on sales by third-party non-EU sellers between 2019 and 2021, notwithstanding Amazon’s settlement of €527 million with Italy’s Revenue Agency in December 2025. The move is highly unusual: in all previous comparable cases in Italy, criminal proceedings were discontinued once a financial settlement was reached with the tax authority. The case raises a fundamental question for the platform economy, namely whether marketplace executives can face personal criminal liability in a foreign jurisdiction for VAT unpaid by sellers using their platform.
South Africa
South Africa withdrew its planned VAT rate increase in the 2026 Budget, with the Finance Minister citing an improved fiscal position driven by stronger than expected tax collection. The decision was vindicated almost immediately: SARS crossed the historic R2 trillion mark in net revenue for 2025/26, with domestic VAT collections up 7.6% year-on-year to R604 billion, boosted by R37 billion recovered through targeted compliance interventions. Rather than raising the rate, the government is instead tightening the rules on how VAT applies to foreign digital service providers using intermediary platforms to reach South African consumers.
Sweden
Sweden published a legislative proposal in February 2026 to strengthen its fight against VAT fraud in cross-border trade, with entry into force planned for 1 July 2026. The Swedish Tax Agency would gain new powers to refuse or revoke VAT registrations where fraud is suspected, mark VAT numbers as invalid in the EU’s VIES system, and delay input VAT refunds pending audit. This sits alongside a separate reform effective 1 April 2026 allowing Skatteverket auditors to log in remotely and inspect businesses’ live cloud accounting systems directly, marking a fundamental shift from traditional document-based audits to real-time digital access.
Other
- The WTO’s longstanding moratorium on customs duties on electronic transmissions, covering software, streaming, e-books and digital downloads, lapsed on March 31, 2026 after members failed to reach agreement at the 14th Ministerial Conference in Yaoundé, Cameroon, marking the first time in 28 years the moratorium has expired. While no country is expected to impose digital tariffs immediately, as customs systems are not currently equipped to collect duties on digital transmissions, the lapse does open the door legally for countries to introduce such duties. Negotiations are set to continue in Geneva, but with no confirmed timeline.
- Chile’s tax authority (SII) issued Resolution No. 38 on 9 March 2026, introducing new codes to the monthly VAT return (Form 29) to separately report VAT on sales made through intermediaries such as commission agents and consignees on behalf of third parties. The new codes apply from the July 2026 tax period, declared from 1 August 2026.
- A recent EY article published in Bloomberg’s Tax Management International Journal argues that generative AI and agentic AI are set to fundamentally transform how tax and finance functions operate, moving beyond automation of routine tasks toward continuous, intelligent decision-making. The authors caution however that success depends on a relentless focus on data quality, accuracy and trust, without which AI adoption risks amplifying errors at scale rather than eliminating them.
- British Columbia announced in its February 2026 provincial budget that provincial sales tax (PST) will be extended to certain professional services such as accounting effective 1 October 2026.
- Ivory Coast introduced a Significant Economic Presence (SEP) tax in its 2026 budget, imposing a 30% tax on the profits of non-resident digital businesses that generate at least 50 million CFA francs (approximately US$90,000) in annual revenue from Ivorian consumers, capped at 10% of that revenue. This creates a dual tax obligation for non-resident digital providers, who must already collect 18% VAT on in-scope services and now face corporate income tax if they meet the SEP threshold.
- The UN Committee of Experts on International Cooperation in Tax Matters has formally included indirect taxes (VAT/GST) as one of its 11 workstreams for the 2025–2029 term. At the 32nd Session in New York in March 2026, the Committee approved the subcommittee workplans, setting the path for delivering practical VAT guidance over the coming years. The work focuses specifically on developing countries and covers VAT refund systems, small enterprise compliance, cross-border VAT issues and use of technology for VAT enforcement.
Disclaimer: The views, statements or opinions expressed in this article are solely those of the author and do not represent tax advice and are not to be designated to be the views, statements or opinions of any other person, group, association or company.
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