Our August edition of the Global VAT Guide brings you key regulatory updates and developments from multiple jurisdictions, including Cyprus, Denmark, Finland, Italy, Latvia, Poland, Slovakia, Albania, Kazakhstan, Pakistan, Singapore, Uganda, United Kingdom and Vietnam. Read on for a summary of what’s new and what it means for your business.
Cyprus
VAT Treatment of admission to virtual events
On 6 June 2025, the Cyprus Tax Department issued Order Κ.Δ.Π. 159/2025, amending the 13th Annex of the VAT Law, with retroactive effect from 1 January 2025.
The amendment clarifies the place of supply rules for cultural, artistic, sporting, educational and similar services:
- For in-person events, the place of supply is where the event occurs
- For streamed or online access, the place of supply demands on the customer’s location (establishment, permanent address or residence)
Organisers and providers of virtual events must now apply VAT based on the customer’s location, not the location of the event organiser. This applies to B2C supplies, aligning with EU VAT principles for digital services.
Businesses should ensure they have appropriate systems in place to identify and validate customer location data for VAT purposes. For further advice with applying the new VAT rules, contact your tax advisor or the Cyprus Tax Department.
Denmark
Increased flexibility for input VAT Reporting
Effective 1 July 2025, BEK nr. 518 of 13/05/2025 amends Paragraph 18 of the Executive Order on VAT, allowing businesses with a new option for the timing of reporting input VAT.
Under the amended Paragraph 81, taxable persons may choose to report input VAT based on the date of “posting” (approval in the accounts) rather than the traditional date of invoice issuance or delivery, provided certain conditions are met.
- Posting must take place within six months
- The purchase must be posted (bookkept) within six months from the time of delivery of the deductible purchase. (Ref. Par. 81(3))
- Consistent application across periods
- The option must be applied uniformly to all purchases and all tax periods (Ref. Par. 81(4))
- Selective or partial application is not permitted
This change provides more flexibility in timing input VAT deductions, particularly useful for late-received invoices or delayed posting.
However, it requires disciplined bookkeeping, as VAT can only be deducted if posting occurs within the allowed six-month window.
Businesses must assess whether to adopt this option systematically and adjust internal processes accordingly.
Excerpt below:
Par. 81
(3) Accounting of input tax can be done by posting the expense in the business accounts instead of at delivery. As a general rule, bookkeeping must take place in the tax period immediately after the tax period in which the deductible purchases were delivered. However, the bookkeeping can take place in later tax periods, but no later than the period that is 6 months after the time when the deductible purchase was delivered. The input tax is then calculated on the basis of the entries made in the business accounts during the tax period.
(4) Input tax shall be entered in the accounts in accordance with the same method in this provision for all purchases in each tax period, except that input tax may be entered in the accounts only once.
Finland
Expansion of electronic notifications
The Ministry of Finance launched a public consultation on the draft government proposal VM002:00/2025, which concerns the expansion of electronic notifications in the Finnish Tax Administration’s OmaVero service.
The deadline for public feedback is 15 August 2025.
The draft legislation proposes that:
- Tax decisions and other tax-related documents would be delivered electronically via the Tax Administration’s online service (OmaVero).
- Taxpayers would be notified of new documents either:
- At the electronic address they have provided to the Tax Administration, or
- Via the Suomi.fi messaging service.
- A document delivered electronically would be considered notified on the third day after it is stored in OmaVero.
Some of the main objectives for this change include:
- Reduce administrative and mailing costs by shifting from paper-based to digital communication
- Improve efficiency and speed of communication between the Tax Administration and taxpayers.
The legislative changes are intended to take effect from 1 January 2026.
Stakeholders, taxpayers and interested parties are invited to submit their views and feedback on the proposal by 15 August 2025.
Italy
Italy’s transition from paper to electronic receipts
In mid-June 2025, the Italian Government approved Resolution No. 7-00286, to phase out traditional paper receipts with electronic receipts for transactions made using electronic payment instruments.
Businesses must generate and transmit receipts digitally for card or digital payments.
Electronic receipts will be delivered to customers via:
- SMS
- Mobile apps
Paper receipts will still be available, but only upon customer request.
Below is the Implementation Timeline for these changes:
| January 2027 | Phase 1: Large-scale businesses |
| January 2028 | Phase 2: Businesses above a specified turnover threshold |
| January 2029 | Phase 3: All other traders |
The threshold for Phase 2 will be defined in forthcoming regulations.
Businesses must ensure they are technically equipped to generate and transmit electronic receipts in compliance with the timeline.
This includes updating POS systems, receipt software and customer communication channels.
Latvia
Latvia’s new VAT registration form
On 17 June 2025, Latvia’s Cabinet of Ministers issued Regulation No. 358, amending the VAT Registration Form to improve data accuracy and streamline the VAT registration process.
The changes affect Annex 2 to Cabinet Regulation No. 17, originally adopted on 3 January 2013.
The revised form introduces updated fields and requirements for taxpayers applying for VAT registration. These changes are part of ongoing efforts to modernise tax administration and improve compliance monitoring.
Entities registering for VAT must use the updated form once it takes effect. Existing businesses should review the new requirements in case of future updates to their VAT status.
Poland
50% VAT deduction for vehicle-related costs
On 25 February 2025, Poland requested a three-year extension from the European Commission to keep the existing 50% input VAT deduction limit for certain vehicle-related expenses. The Commission issued its proposal to extend on 10 July 2025.
The 50% deduction cap applies to:
- Purchase, intra-community acquisition, import, hire and leasing of motor vehicles not used exclusively for business purposes
- Expenditure related to such vehicles, including fuel costs
These measures do not apply to:
- Vehicles with more than 9 seats, including the driver
- Vehicles with a total maximum weight exceeding 3,500 kg
- Expenditure fully related to the taxable person’s business activities
Below is a timeline of the extension process:
| 25 February 2025 | Request submitted to the European Commission |
| 11 April 2025 | Commission confirmed receipt of all required information |
| 10 July 2025 | Proposal for a decision to extend the measure was issued |
If granted, the derogation will be extended for another 3 years:
Poland must submit a new extension request by 31 March 2028, supported by a detailed report justifying the continued need for the restriction.
Businesses operating mixed-use vehicles should continue applying the 50% input VAT deduction limit, unless full business use can be clearly demonstrated.
It is essential to maintain adequate records to support any full deduction claims.
Slovakia
Late VAT registration
In April 2025, the Financial Directorate of the Slovak Republic issued official guidance for businesses who missed the VAT registration deadline after exceeding the mandatory threshold of EUR 49,790 in the 12 consecutive months, before 1 January 2025.
The guidance applies to taxpayers who:
- Reached the registration threshold before 1 January 2025
- Submitted their VAT registration application after the 20-day deadline
- Registered during 2025
Late applicants must use the “old” registration form:
- REGDPv21 — Application for registration, notification of changes, application for cancellation of registration for income tax, VAT and insurance tax.
The Tax Office will process these applications under rules in effect before 31 December 2024. From the 22nd day after the taxpayer should have registered until the day before the actual registration, the person is treated as a taxpayer for VAT purposes.
Obligations during this period:
- File VAT returns in chronological order for each month in this period
- Submit zero VAT returns if not transaction occurred
- File returns within 25 days after the end of each calendar month
- Claim input VAT deductions for this period, if applicable
- File VAT Control Statements in chronological order for each applicable month.
- VAT Control Statements are not required for months where a zero VAT return was submitted
- Issue corrective invoices (debit notes) to customer to adjust the sale prices and include VAT. for the relevant period.
- Filing obligations for “older” months are retroactive and will be submitted after their legal deadlines.
These filings are retroactive and may occur well after their original deadlines. The Directorate’s guidance includes examples to help you apply the rules correctly.
Next steps for late registrants:
- File retroactive VAT returns and Control Statements
- Adjust invoices issued during the period of unregistered activity
- Use the correct (pre-2025) registration process
Act quickly to reduce penalties and maintain compliance.
Slovakia
FAQs in relation to Simplified Invoices
In June 2025, the Financial Directorate of the Slovak Republic published a set of Frequently Asked Questions (FAQs) for the use and acceptance of simplified invoices under Slovak VAT rules. The guidance clarifies several important aspects for businesses issuing or receiving such invoices:
- Input VAT deduction is allowed
- Simplified invoices (up to EUR 400) are valid for input VAT deduction, provided they contain all legally required information.
- Payment method is not relevant
- The method of payment—cash or card—does not affect the right to deduct VAT on a simplified invoice.
- Cash receipts can qualify as full invoices
- A cash register receipt that includes all required elements of a full invoice (including customer identification) is treated as a valid full VAT invoice.
- Invoices above EUR 400 can be issued to non-VAT registered individuals
- For sales exceeding EUR 400, a simplified invoice may still be issued if the customer is a natural person (i.e. not VAT registered).
- No VAT deduction from receipt copies
- VAT deduction is not allowed if the original receipt is lost and only a copy is available.
- Additionally, issuers are not permitted by law to issue a copy of a simplified receipt.
What you should do now:
- Ensure cash receipts contain all necessary data (including buyer details) to be valid for VAT purposes.
- Maintain proper documentation and archiving of original invoices and receipts.
- Train accounting staff on when simplified vs. full invoices apply, especially for sales to individuals vs. businesses.
Slovakia
FAQs on the Special Tax Exemption Scheme for small businesses
The Directorate of the Slovak Republic also released a set of FAQs clarifying the application of the Special VAT Exemption Scheme for Small Enterprises (SMEs), as established under the EU VAT Directive.
Some key clarifications include:
- Cross-border scope only
- The SME scheme applies only to cross-border supplies where the place of supply is in another EU Member State.
- It does not apply to domestic (local) supplies within Slovakia.
- Objection rights
- If a Member State refuses to allow a taxpayer to use the SME scheme, the taxpayer may file an objection directly in that Member State, following local procedures.
- Exceeding local thresholds
- If a taxpayer exceeds the local exemption threshold in one or more Member States, they may still register and benefit from the One-Stop Shop (OSS) scheme in those states.
- Use of SME and OSS schemes
- Taxpayers may use the SME scheme and OSS scheme simultaneously, but not within the same Member State.
- Invoice requirements
- When issuing invoices under the SME exemption:
- It is recommended to include the supplier’s VAT number
- It is mandatory to include a reference/note that the supply is exempt from VAT under the SME scheme
- When issuing invoices under the SME exemption:
Small businesses involved in cross-border trade should evaluate if they qualify under the SME scheme. Accurate invoicing and correct identification of the place of supply are essential to benefit from the exemption.
Businesses using both the SME and OSS schemes should carefully track which scheme applies per country to remain compliant.
Albania
Pre-populated VAT return
The Albanian General Directorate of Taxes announced the implementation of pre-filled VAT returns to streamline the VAT reporting process through integration with the fiscalisation system.
This change came into effect from April 2025 VAT reporting period onward.
Pre-filling is based on data recorded in the sales and purchase books, as reported via the fiscalisation system.
Data is automatically transferred to the E-filing system once the books are submitted.
Pre-filling occurs either:
- When the taxpayer manually closes the books in the SelfCare system before the 10th of the following month, or
- Automatically, once the legal deadline expires and the books are closed by the system
The pre-filled data is editable: taxpayers may correct or adjust the figures in the VAT return as needed.
If changes are made to the books via Excel upload in the E-filing system (not through the fiscalisation system), these changes do not update the pre-filled VAT return automatically.
The taxpayer must manually reflect those changes in the VAT return form.
Taxpayers should review pre-filled data carefully before submission.
Taxpayers should ensure that all changes made to sales/purchase books—especially via Excel—are also reflected in the return manually.
Businesses should update internal processes and staff training to account for the new workflow.
Chile
Simplified VAT registration
On 10 July 2025, the Chilean Tax Authority (SII) published Resolution No. 84, introducing a simplified VAT registration regime for non-resident digital platform operators supplying low-value goods to Chilean consumers.
This new regulation comes into effect from 25 October 2025 and will apply to non-resident digital platform operators supplying goods to Chilean consumers.
This change only relates to low-value goods (≤ USD 500) per item for B2C only (Business-to-Consumer).
VAT Filing Frequency is either monthly or quarterly filing (based on business preference).
Registration Period begins in August 2025 via the Chilean VAT Portal.
Kazakhstan
Changes in tax code
On 18 July 2025, the President of Kazakhstan signed Law No. 214-VIII, amending the Tax Code and introducing several significant changes to the country’s Value Added Tax (VAT) regime.
One of the changes includes:
- Lower VAT Registration Threshold
- The VAT registration threshold will be reduced from approx. 80 million tenge to 40 million tenge, effectively halving the threshold.
- The exact threshold is defined in Monthly Calculation Index (MCI) units. For reference, 1 MCI in 2025 = 3,932 tenge.
Check out our International VAT Rate Round Up for August 2025 for more information.
All changes will come into force on 1 January 2026.
Smaller businesses near the new threshold should assess their VAT registration obligations.
Pakistan
Mandatory tax registration for digital providers
From 1 August 2025, Pakistan requires all resident and non-resident e-commerce providers to register for sales tax. The Federal Board of Revenue (FBR) issued Circular No. 02 of 2025-26 (Sales Tax and Federal Excise), introducing significant reforms to bring digitally ordered goods and services into the sales tax net, enhance compliance and align definitions with other tax legislation.
Inland Revenue is granted the authority to compulsorily register any non-compliant businesses compulsorily.
Definitions now cover:
- E-commerce: Introduced to ensure digitally ordered taxable goods fall under the sales tax net
- Online Marketplace: Aligned with the Income Tax Ordinance, 2001; now includes all forms of taxable e-commerce activities.
- Courier: Includes delivery and cash collection agents (e.g. logistics providers, ride-hailing services) who act on behalf of sellers in e-commerce (now withholding agents).
Online marketplaces, payment intermediaries and couriers must file monthly sales tax statements.
Singapore
GST forecast registration changes
From 1 July 2025, the Inland Revenue Authority of Singapore (IRAS) released the Fourth Edition of its e-Tax Guide: “GST: Taxing Imported Low-Value Goods by Way of the Overseas Vendor Registration (OVR) Regime.” This edition extended the registration deadline for forecast-based GST obligations. The effective date of registration is two months after forecast date, instead of 31 days.
For example, if the forecast date is 2 September 2025, the registration date will be 2 November 2025. This provides more time for overseas and local vendors to prepare for GST obligations once a registration obligation is triggered.
Overseas OVR Vendor must register when there are reasonable grounds to believe:
- Global turnover will exceed SGD 1 million, and
- Supplies to Singapore will exceed SGD 100,000
Local OVR Vendor must register when taxable turnover is expected to exceed SGD 1 million. Forecast assessment can be made at any time.
Businesses should monitor forecast turnover regularly to assess registration obligation.
Uganda
New bills signed into law
On 30 June 2025, Uganda’s president signed several key tax and financial bills into law, effective 1 July 2025, including:
- Value Added Tax (Amendment) Act, 2025
- Stamp Duty (Amendment) Act, 2025
- Excise Duty (Amendment) (No. 2) Act, 2025
- Tax Procedures Code (Amendment) Act, 2025
- Supplementary Appropriation Act, 2025
- Hides and Skins (Export Duty) (Amendment) Act, 2025
- External Trade (Amendment) Act, 2025
- Appropriation Act, 2025
These amendments reflect changes across indirect taxes, trade regulations, export duties, and public spending approvals for FY 2025/26.
United Kingdom
Postponed Import VAT update
On 24 June 2025, HMRC published Agent Update: Issue 132, which includes an important procedural update to the VAT Registration Service (VRS), implemented from 19 May 2025.
When completing a VAT registration application via the VRS, applicants are now required to provide a breakdown of their taxable turnover, specifically by VAT rate:
- Standard rate (20%)
- Reduced rate (5%)
- Zero rate (0%)
The system will:
- Display the breakdown of values entered
- Show the total taxable turnover
- Ask the user to confirm whether the breakdown is correct or incorrect
Vietnam
New input VAT deduction requirement
On 1 July 2025, the Vietnamese Government issued Decree 181/2025/NĐ-CP, which took immediate effect on the same day. Among the key changes is a new requirement concerning input VAT deduction eligibility for business purchases.
To be eligible for input VAT deduction, businesses must now retain non-cash payment evidence for the purchase of goods or services worth at least VND 5 million (approx. EUR 164), including VAT.
This requirement applies to:
- Domestic and imported goods
- Goods and services for business purposes
The following payment methods still qualify for VAT deduction if accompanied by valid non-cash payment documentation:
- Offsetting payments (e.g. barter, clearing of mutual debts)
- Payments made via third-party authorisation
- Deferred or instalment payments
If an employee pays non-cash on behalf of the business and the business reimburses the employee via non-cash means, VAT is deductible
If the total value on the same day transactions reaches VND 5 million or more, input VAT is deductible only if a non-cash payment document is available An exception to the rule are imported gifts and samples less than 5 million VND – there is no need for non-cash payment.
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