In this update, we provide a summary of important VAT developments from January with implications for global business operations.
New Belgian circular letter on the VAT implications of credit insurance
In a circular letter effective as of 1 January 2025, the Belgian VAT authorities have updated their position on the entitlement to a VAT refund for receivables covered by credit insurance. This update aligns the Belgian administrative position with the decision of the CJEU in case C-482/21, Euler Hermes SA.
Approval of the Supplementary Law on Tax Reform
Brazilian Government enacted Supplementary Law No. 214/2025, which sets out the main guidelines for Tax on Goods and Services (IBS), the Social Contribution on Goods and Services (CBS), the Selective Tax (IS), and creates the IBS Management Committee.
China's New VAT Law
China's new Value-Added Tax (VAT) Law was passed on 25 December 2024. This new law consolidates existing regulations into a unified framework with certain innovations and improvements in specific policies. As the largest tax, VAT accounted for about 38% of national tax revenue in 2023, remaining a crucial funding source.
New French administrative guidelines - Regularisation of incorrectly invoiced VAT
The French tax authorities have clarified the time limit, conditions and procedures for regularising incorrectly invoiced VAT in a welcomed modification of their guidelines.
VAT grouping: Final verdict of the German Federal Fiscal Court in Finanzamt T
The German Federal Fiscal Court (BFH) has recently issued a judgement that ends a dispute that has lasted for more than five years. As had been anticipated, the BFH concurs with the verdict of the CJEU and confirms that intra-group transactions within the VAT group are non-taxable.
Italy broadens Digital Services Tax scope
The Italian Budget Law 2025 amends the Digital Services Tax (DST), effective from 2025. Key changes include adjustment to the compliance rules and, more importantly, the removal of the EUR5.5m revenue threshold, limited to digital services provided in Italy. Now all entities joining a group with a turnover exceeding EUR750m carrying on digital service in Italy will be subject to DST.
Dutch Attorney General (AG) issues conclusion on impact of receiving VAT exempt interest income on VAT recovery position of a notary
Attorney general of Dutch Supreme Court issues conclusion that interest received by a notary, pertaining to funds held in a trust account, does not qualify as a taxable supply for Value Added Tax (VAT) purposes. Further review of VAT deduction right of notary is required.
Extension of the applicability of RO e-Invoicing system to B2C transactions
Starting 1 January 2025 taxpayers established in Romania that carry out taxable operations in Romania have the obligation to report invoices issued to non-VAT taxable persons in the RO e-Invoicing system.
VAT treatment of sale and lease-back transactions clarified
The Spanish Tax Court clarifies that Sale and Lease-back transactions qualify for VAT purposes as a single financing transaction, and not a supply of goods, when the lessee retains possession of the goods and the transaction's sole purpose is to provide financing to the lessee.
Upper Tribunal holds that Sonder's short term accommodation failed the TOMS tests
Sonder found liable to pay VAT on full value of accommodation rather than on the margin under TOMS.
States Searching for Uniform Solution to Tax Digital Products
US states are increasingly eyeing online digital transactions as a potential boost to their budget woes. As a result, future taxes on consumers may extend to products, services and locations where transactions are currently exempt.
