August: VAT and sales tax round-up

 

Global VAT and sales tax rules continue to change rapidly across global markets, with tax authorities placing greater focus on digital compliance, reporting transparency and cross-border enforcement. Below is a roundup of some of the latest VAT and sales tax updates businesses should have on their radar.

General VAT updates:

UK: Barclays fails to bring US company into UK VAT group. Upper Tribunal confirms no UK fixed establishment.

UK: Capital Goods Scheme reformed from 29 July. Computers removed from CGS, land/building threshold rises from £250,000 to £600,000.

EU: Denmark’s 100% ownership rule for VAT grouping breaches EU law unless justified as anti-avoidance, General Court rules in Sampension.

Kentucky: 200-transaction nexus threshold scrapped from 1 August. Nexus now based on $100,000 sales alone.

Alaska: Remote sellers and marketplace facilitators register once sales into Alaska hit $100,000 in a year. The 200-transaction threshold was scrapped from January 2025, so nexus is now revenue-only.

US: IRS launches Automatic Exemption from Penalty, replacing First Time Abate. Form 5472 penalties now enforced at $25,000 per form.

Amazon: VCS now calculates VAT on total invoice net amount, with rate set by fulfilment centre location, not buyer location.

Hungary: VAT on prescription medicines abolished, dropping from 5% to 0% from 1 September 2026.

Kenya: Reduced 8% VAT on petroleum products extended a further three months, through 14 October 2026.

US: Texas, Ohio, Missouri, Virginia, South Carolina and Oklahoma run sales tax holidays 7–9 August on clothing and school supplies under $100 per item.

Illinois: Northern Illinois Transit Authority tax rises 0.25% from 1 August across six counties.

e-invoicing updates:

Spain: Bill transposing ViDA Stage 1 approved, 29 June.

Lithuania: ViDA Stage 1 law adopted, 23 June.

Italy: Consultation opens on draft decree transposing 2027 ViDA provisions.

UK: HMRC confirms Peppol as its e-invoicing standard, setting the technical backbone for mandatory B2B/B2G e-invoicing from 2029.

CESOP: Updated Data Quality Checklist published. Spain opens first Model 242 filing window. Greece updates CESOP XSD guide to v7.00.

Brazil: Registration and e-invoicing obligations for non-resident digital service providers begin 1 August 2026, ahead of substantive CBS/IBS tax collection starting 1 January 2027.

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