- Iman Deschâtres
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With the start of the fourth quarter came a flurry of budget discussions, and as governments search for revenue, they are considering a range of measures targeting digital companies—measures that will erode profit margins without proper management.
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.
European Union
Platforms offering services may become liable for VAT in the EU on behalf of the service provider, following the ECJ Xyrality (C-101/24) judgment published on 9 October 2025. This would align with countries outside the EU that have adopted a broad definition of services. Platforms should review their processes and their role in the transaction.
The attorney who represented Xyrality in front of the ECJ and DepTax founder will hold a webinar on the subject on November 6th at 4pm CET. Link to register here.
China
The first reporting obligation concerning Chinese sellers, applicable to both foreign and domestic platforms, took effect on 31 October 2025. It arises from provisions published on 20 June 2025. In certain cases, platforms may also be required to withhold tax on sellers’ income. It appears that 6,654 platforms have registered. More information here.
Colombia
Non-resident platforms must submit information to the tax authorities regarding Colombian-source income. The first filing deadline is February 27, 2026.
Mexico
Mexico proposes extending the marketplace withholding obligation on seller income to B2B sellers. This would require marketplaces to issue CFDI withholding invoices. Platforms would also have to report information for all sellers, including legal entities, nonresidents, and Mexican sellers with offshore settlements, even if the platform does not process the payment. The Mexican authorities will issue further administrative rules on the reporting obligation. Income-tax withholding for Mexican individuals selling via platforms is set to rise from 1% to 2.5%.
Digital Service Tax and Significant Presence Tax
An EY paper notes that, with BEPS Pillar One stalled and revenue needs rising, DSTs are back and broadening. Italy illustrated the trend earlier this year by scrapping the €5.5m domestic threshold and keeping only the €750m global threshold, widening the in-scope population.
India
India ended the Equalisation Levy in August 2024 but has just revised “Significant Economic Presence” in the Income-tax Act, 2025, effective 1 April 2026. Non-residents can be taxed in India based on digital/economic nexus alone, without physical presence. Foreign companies should assess their obligations and potential impact.
France
In September, France’s Constitutional Council upheld the Digital Services Tax (“taxe GAFAM”). Lawmakers have now approved to double the rate from 3% to 6% and raise the revenue threshold to €2 billion, which would reduce the number of in-scope companies, particularly the French firms that challenged the tax last summer.
Turkey
A proposal in Turkey has been made to increase the Digital Services Tax (DST) rate from 7.5% to 12.5%. At the same time, authorities are contacting companies to enforce the current DST, stating that the global revenue threshold of EUR 750 million and the local revenue threshold of TRY 20 million (≈ EUR 412K) are alternative, not cumulative.
Kenya
Kenya’s income-tax regulations published in September clarified the scope of the Significant Economic Presence (SEP) tax and removed the previous KES 5 million threshold, making the 3% tax applicable from the first qualifying sale.
Enforcement
Governments are tightening enforcement to raise revenue.Consumption taxes are meant to be neutral for companies, which should be able to pass them on to end consumers. The same applies to withholding tax on sellers’ income. However, in cases of non-collection, these taxes become a final cost of doing business and erode profit margins. This can show up directly in quarterly results, and even a one-off fine can affect market capitalisation and investor confidence.
Albania
Earlier this year, Albanian Tax authorities reportedly sent multiple letters to foreign companies reminding them of the obligation to register and appoint a fiscal representative. Those notices form part of the tax administration’s efforts to raise awareness, encourage voluntary compliance, take appropriate legal measures, prevent tax avoidance, and ensure equal treatment of taxpayers and fair market competition.
Other
Russia is due to increase its VAT rate to 22% from January 2026.
Bhutan is introducing GST at 5% as of January 2026 and expands obligations on foreign suppliers.
The UK is considering abolishing the £135 de minimis threshold for customs. Additional information should be provided in the November Budget.
Amazon is advocating in the UK to be made liable for VAT on behalf of all sellers, regardless of value or seller location, to reduce seller checks, increase tax collection, and curb fraud. There are no comments on the potential impact of this reform on UK sellers, who may find themselves in a constant VAT recovery position.
Taiwan’s e-invoicing system has been in place for more than 50 years and includes B2C transactions. A paper by the Taiwanese tax authorities shows the data is used not only to curb fraud but also as a sales/economic indicator. With e-invoicing mandates expanding globally, more countries are likely to use the data received for economic analysis, not just to combat tax fraud.
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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