Global VAT Guide: December 2025

The December edition of our Global VAT Guide covers key VAT regulations and developments in Bulgaria, the European Union, Finland, Germany, Hungary, Italy, Ireland, Lithuania, Poland, Romania, Spain, Ghana, Sri Lanka, United Kingdom.

This summary helps you keep track of the latest regulatory changes, key dates and compliance impacts for your business.

Bulgaria

Intrastat Threshold for 2026

The Bulgarian National Revenue Agency (NRA) has published the new Intrastat thresholds for 2026 under Order No. RD-05-665/14.10.2025. These updated limits apply to both simplified and detailed Intrastat reporting.

Simplified Intrastat Reporting Thresholds (2026)

• Dispatches:
  • BGN 2,250,000 / EUR 1,150,407
    • Increased from BGN 2,200,000 in 2025
• Arrivals:
  • BGN 1,760,000 / EUR 899,874
    • Increased from BGN 1,700,000 in 2025

Detailed Intrastat Reporting Thresholds (2026)

• Dispatches:
  • BGN 34,760,000 / EUR 17,772,506
    • Decreased from BGN 36,100,000 in 2025
• Arrivals:
  • BGN 18,760,000 / EUR 9,591,836
    • Increased from BGN 17,000,000 in 2025

Threshold for Simplified Declaration of Low-Value Transactions

• BGN 1,956 / EUR 1,000
  • Increased from BGN 500 in 2025

These changes are important for businesses trading within the EU, helping ensure compliance with Intrastat reporting requirements while streamlining reporting for lower-value transactions.

European Union

EU Commission releases 2026 Combined Nomenclature

Publish date: 31 October 2025 | Effective: 1 January 2026

The Official Journal of the European Union published the updated Combined Nomenclature (CN) for 2026. The CN forms the basis for the declaration of goods at importation or exportation or when subject to intra-union trade statistics. This determines which rate of customs duty applies and how goods are treated for statistical purposes.  Key changes in this release include:

• 27 newly introduced CN codes
• 10 deleted CN codes

Additionally, in line with the Harmonized System (HS) adopted by the World Customs Organization, Additional Note 1 to Chapter 95 of the CN has been removed. This note previously covered “articles for Christmas festivities.”

Finland

Manage company email addresses in MyTax

The Finnish Tax Administration announced a new feature in MyTax, allowing companies to manage the email addresses associated with their tax notifications.

• On the “Customer Information” tab in MyTax, authorised company representatives can view, add, or remove email addresses for tax-related communications.
• The email addresses listed correspond to those previously used for submitting tax returns and other related communications.
• Only authorised representatives with signing rights for the company or a Tax Management mandate can see or edit the email addresses, as well as subscribe to notifications.

The Tax Administration encourages companies to regularly review and remove outdated, expired, or unnecessary email addresses to maintain up-to-date contact information.

Finland

Intrastat changes

Publish date: 24 November 2025 | Effective date: 1 January 2026

The Finnish Intrastat authority has announced several important Intrastat changes that will take effect on 1 January 2026:

Intrastat Arrivals phased out:

• Intrastat Arrivals will no longer be required for reporting periods from 1 January 2026.
• Similar to changes adopted in Estonia in 2025, the Finnish Intrastat authority confirmed that Intrastat data collection for arrivals will be replaced by export data collected by other EU Member States to determine its import statistics.
• Starting in 2026, Finnish Customs will rely on microdata received from other Member States for EU imports of goods.
• The authority estimates that this change will reduce businesses’ administrative burden by approximately 70%, and notification letters are being sent to 4,432 companies.

Intrastat Dispatches

• The threshold for dispatches remains €800,000, unchanged from 2025
• Authorities indicated that future threshold will be defined in such a way that the smallest Finnish companies are exempt from Intrastat reporting obligations.

Intrastat Arrivals (2025) – Correction timelines

• Corrections to Intrastat declarations for statistical periods January 2025 and February 2025 can be made in the Intrastat Declaration Service until 31 December 2025.
• Corrections for all other 2025 periods may be submitted until 14 August 2026.

These changes significantly simplify Intrastat reporting for Finnish businesses, particularly smaller companies, while maintaining accurate EU trade statistics.

Finland

Revised NACE codes

Publish date: 25 November 2025 | Effective date: Beginning of 2026

The Finnish Tax Administration (VeroSkatt) has announced the introduction of a revised Standard Industrial Classification, TOL 2025, aligned with NACE Rev. 2.1 nomenclature. The new classification will be implemented by the Tax Administration at the beginning of 2026.

• Automatic updates: Companies’ industry codes will be automatically updated by VeroSkatt at the start of 2026 to reflect new classification.
• No separate notifications: The Tax Administration will not issue individual notices regarding these updates. Taxpayers can review and if necessary, update their industry classification in MyTax once the changes appear in the Business Information System.
• Key affected sectors:
• Building construction
• Restaurants
• Renting and management of real estate
• Retail sale of motor vehicles
• Physiotherapy

Source: https://eur-lex.europa.eu/eli/reg_del/2023/137/oj

Germany

Input VAT deduction and eInvoicing

Germany introduced mandatory B2B eInvoicing on 1 January 2025, marking a major shift in how invoices must be issued, transmitted and validated. The transition period runs until 31 December 2027, giving businesses time to adapt their systems and processes. The new requirements directly affect invoice formats, VAT deductibility, and compliance obligations for businesses operating in Germany.

Scope of eInvoicing

Transactions covered:

Mandatory eInvoicing applies to domestic B2B transactions, including:

• Standard taxable supplies
  • Reverse-charge transactions
    • Taxable real estate services
    • Transactions involving SMEs
    • Tax-exempt transactions
• Advance payments
• Credit notes

Taxpayers covered

• Domestic businesses: All German-established taxpayers, including small businesses (Kleinunternehmer), must be able to receive eInvoices.
• Foreign businesses: No eInvoicing obligation applies if at least one party is not established in Germany.

Requirements for a proper eInvoice format

A compliant eInvoice must:

• Be issued in a structured electronic format aligned with EN 16931 or an interoperable standard.
• Contain all mandatory VAT data required under §14 and §14a UStG within the structured part.
• Allow for electronic processing—a simple PDF or external link is not sufficient.

Acceptable formats:

• XRechnung (fully structured format)
• ZUGFeRD (hybrid format), from Version 2.0.1 onwards—excluding MINIMUM and BASIC-WL profiles
• EDI formats, provided they meet EN 16931 requirements

Permitted transmission methods

eInvoices may be delivered via:

• Email
• Download from an internet portal
• EDI or other electronic interfaces
• Shared access to a central storage repository

Input VAT deductibility conditions

To claim input VAT, businesses must receive a fully compliant eInvoice whenever eInvoicing is legally required.

Key rules:

• All mandatory VAT data must be included in the structured EN 16931 dataset
• For hybrid eInvoices, only the structured component is relevant for VAT deduction
• Practices such as referencing delivery notes to supply missing data are no longer valid
• If a supplier issues non-compliant invoice, input VAT cannot be deducted until a compliant eInvoice is provided.

Non-compliant (“Other”) invoices include:

• Paper invoices
• Unstructured electronic formats (e.g., plain PDFs, image files)
• Information contained in the body of an email
• Files with format errors preventing structured data validation

Correction requirements

Where an invoice has been issued in an incorrect format:

• The supplier must issue a corrective eInvoice, explicitly referencing the original invoice
• Sending corrected data via another channel (e.g., email) is not sufficient
• Handwritten amendments—previously common in construction—are no longer valid unless a corrected electronic invoice is issued.

Validation and compliance requirements

Businesses should establish tools and control that verify:

• Syntax compliance (structured format validaty)
• Business rules compliance (e.g. correct tax rate and tax calculation)

Additional requirements:

• Retain validation reports is recommended as evidence of due diligence.
• Validation tools do not remove the recipient’s responsibility to check invoice accuracy
• Issued and received eInvoices must be archived for eight years, in line with existing retention rules.

Exemptions from mandatory eInvoicing

The following remain outside the scope:

• Small-value invoices under €250
  • Travel tickets
  • Invoices issued by small businesses under the Kleinunternehmerregelung

Transitional period (2025–2027)

Mandatory rules came into effect on 1 January 2025, with phased-in obligations running through 31 December 2027. The transition allows businesses to upgrade systems, implement structured formats, and adjust internal processes.

Germany

Migration of German Intrastat INSTAT/XML uploads from IDEV to eSTATISTIK.core

The German Intrastat authorities have announced a major change to the submission process for INSTAT/XML files. Starting 17 September 2025, the current upload process via IDEV will be phased out in favour of the new eSTATISTIK.core platform.

Key changes

• From 17 September 2025, companies can submit INSTAT/XML files via:
  •  the existing IDEV portal, and
  • the new eSTATISTIK.core platform
• Enhanced validation:

eSTATISTIK.core performs both schema and content checks, meaning only compliant files will be accepted.

• Files with schema violations or content errors will be rejected.
• This is a key difference from IDEV, which provided more limited validation.

Transition period

• A transition window  will be in place for several months to a year, during which companies can submit INSTAT/XML files via both IDEV and eSTATISTIK.core.
• After this period, file submissions via IDEV will no longer be possible.
• Going forward, all INSTAT/XML files must be submitted through eSTATISTIK.core.

New submitter rules after 18 September 2025

• Any company submitting INSTAT/XML files for the first time after 18 September 2025, must use eSTATISTIK.core to submit their files.
• IDEV will no longer be used for initial file submissions, and test submissions through IDEV will no longer be reviewed by the Federal Statistical Office.

Registration and support

• Registration is now available for software companies who can assist in the submission process for their clients, unlike the previous IDEV reporting procedure.
• Please note that after the transition, all compliance and validation checks will only be possible directly through eSTATISTIK.core.

Next steps

A detailed letter regarding the final deadline for this migration will be sent to all companies submitting INSTAT/XML reports.

Germany

Retirement of XML-RPC Interface for VAT ID Validation

Effective date: 30 November 2025

Germany’s Federal Central Tax Office (Bundeszentralamt für Steuern, BZSt) has announced that the current XML-RPC interface used for validating foreign VAT IDs will be retired on 30 November 2025. From this date forward,  all validations must be performed via a new REST API.

Migration to REST API

• The XML-RPC interface will be fully discontinued on 30 November 2025
• A REST API will replace the existing service for all VAT ID validation requests
• Companies are responsible for integrating the new REST API into their systems; the BZSt will not provide support for implementation.

Electronic response format

• The electronic response (data record) returned by the BZSt through the REST API can be incorporated directly into the company’s internal systems for automated processing and analysis.
• When conducting bulk VAT ID checks through the interface, the data record transmitted by the BZSt can likewise be directly integrated and analyzed within the company’s system.

In these cases, proof of a qualified VAT ID query must be documented using the data record received from the BZSt.

Hungary

Gradual increase in the VAT registration threshold

Publish date: 21 November 2025

On 17 November 2025, Bill No. T/13110 – Measures to Reduce the Tax Burden on Businesses was submitted to the Hungarian Parliament. The proposal introduces amendments to several tax laws, including Act CXXVII of 2007 on Value Added Tax (VAT).

A central element of the package is a gradual increase in the VAT registration threshold, designed to ease administrative obligations for small businesses.

The new thresholds were approved and published in the Official Gazette (MAGYAR KÖZLÖNY No. 137) four days later, on 21 November, and will apply as follows:

• HUF 20 million from 1 January 2026

• HUF 22 million from 1 January 2027

• HUF 24 million from 1 January 2028

Italy

New consolidated VAT law

Publish date: 14 July 2025 (preliminary approval)  | Effective date: 31 December 2025 (subject to parliamentary approval)

Italy’s long-awaited Il Testo Unico IVA, the consolidated VAT code, received preliminary approval by the Council of Ministers on 14 July 2025. The consolidated text comprises 18 sections and 171 articles, and aims to:

• Simplify the VAT legal framework
• Enhance clarity
• Support stronger compliance across the system.

Since early September, the draft legislative decree (Atto del Governo n. 293) has been under parliamentary review in the Senate, which is required to issue opinions through the competent committees.

Some key areas under Senate review

• Technical alignment with other ongoing tax reforms, including the ETS decree and the new Tax Code.

• Issues raised by professional bodies, particularly the treatment of non-commercial entities and the application of reduced VAT rates.

• Feasibility of the implementation timeline, balancing the need for prompt adoption with a thorough legislative review.

The Government has reiterated the urgency of approval, stressing the importance of providing businesses and professionals with a coherent and modernised VAT framework ahead of the 2026 deadline.

Parliamentary committees are expected to issue their opinions in the coming weeks, with final adoption anticipated by 31 December 2025, unless the deadline is extended. Businesses should begin preparing for upcoming digital compliance obligations and should review their VAT procedures in light of the impending reforms.

Ireland

Update to VIES Trader Manual

Publish date: 17 November 2025

Irish Tax and Customs has releases Revenue eBrief No. 214/25, announcing updates to the VIES Traders Manual. The changes reflect Ireland’s continued shift toward modern, user-friendly digital compliance tools.

Updated Annex 2 – New links to Return Preparation Facility

Annex 2 of the VIES Traders Manual has been updated to include links to:

• the Return Preparation Facility (RPF), and
• the CSV template used within the RPF

As the Irish Revenue transitions away from the ROS Offline application, the RPF becomes the central platform for preparing and submitting declarations previously handled through ROS Offline. The RPF web application is continuously updated, ensuring taxpayers always work with the latest file specifications.

CSV Template for high-volume data

To support traders handling large volumes of data, the updated manual now provides access to a simplified CSV template, enabling faster and more efficient preparation of VIES submissions.

Continued focus on user-friendly services

The update reinforces Irish Tax and Custom long-standing commitment to transparent, user-friendly, and easily accessible digital tools. These enhancements to the VIES Trader Manual are designed to simplify compliance and ensure taxpayers can fulfil their VIES reporting obligations with ease.

Lithuania

Intrastat Threshold for 2026

Effective date: 1 January 2026

The Lithuania Statistics Portal has announced updated Intrastat thresholds effective 1 January 2026. The changes affect the thresholds for Simplified Reporting and Detailed Reporting for Intrastat declarations.

Simplified Intrastat Reporting Thresholds (2026)

• Dispatches: €400,000.00
  • Unchanged from 2025

• Arrivals: €600,000.00
  • Increased from €570,000.00 in 2025

Detailed Reporting Thresholds (2026)

• Dispatches: €10,000,000.00
  • Unchanged from 2025

• Arrivals: €7,000,000.00
  • Unchanged from 2025

The changes introduce only a minor adjustment – a higher arrivals threshold—reducing reporting requirements for some import-heavy businesses. All other thresholds remain stable for the upcoming year.

Poland

Draft amendment to Article 33a(6a) VAT Act on Import VAT reporting (12 November 2025)

Published date: 12 November 2025

On 12 November 2025, the Polish Senate published a draft bill amending Article 33a, paragraph 6a of the Polish VAT Act. The purpose of the amendment is to facilitate the reporting of import VAT through the VAT return, aligning the legislation with changes introduced in the AIS/IMPORT PLUS customs system implemented on 19 June 2025.

These system changes modified the data requirements under the simplified customs declaration regime, making updates to the VAT Act necessary.

Proposed changes

Under the draft amendment:

• If a taxpayer has not settled all or part of the VAT due on the import of goods, the taxpayer may:
  • amend the VAT return not only within the existing 4-month deadline (counted from the month following the month in which the import VAT obligation arose),
  • but also, beyond this deadline, provided that:
    • The amendment is submitted within one month after the deadline for submitting a supplementary customs declaration, and
    • The taxpayer applies the simplified procedure under Article 166 of the Union Customs Code (UCC) and
    • The taxpayer holds Authorised Economic Operator (AEO) status within the meaning of Article 38 UCC.

Scope

Once adopted, the amended rules will apply to imports of goods for which a simplified customs declaration submitted after 18 June 2025, i.e., the date immediately following the implementation of AIS/IMPORT PLUS. This update is designed to facilitate compliance for businesses using the simplified import regime and to align VAT reporting with modernised customs procedures.

Romania

Intrastat Thresholds for 2026

Publish date: 5 November 2025 | Effective date: 1 January 2026

The Romanian Official Gazette published the Romanian National Institute of Statistics’ Order No. 1604 of 27 October 2025, establishing the Intrastat thresholds for 2026 for collecting statistical information on intra-EU trade in goods.

There will be no changes to the Intrastat reporting thresholds for 2026.

Intrastat Thresholds for 2026

• Arrivals: 1,000,000 lei
• Dispatches: 1,000,000 lei

These thresholds remain the same as those in place for 2025. Businesses can continue using the same reporting thresholds as in the previous year, simplifying compliance for 2026.

Spain

Invoicing – VeriFactu mandate postponed

Spain’s Royal Decree 1007/2023, published on 5 December  2023, introduced a significant formal tax obligation for businesses and professionals to ensure that electronic invoicing systems guarantee:

• Integrity, traceability and immutability of invoicing records
• Accessibility, legibility and secure preservation of invoices
• Proper logging of any changes, ensuring no unauthorised alterations, omissions or interpolations

By July 2025, invoicing software providers were originally required to adapt their systems to these standards.

VERI*FACTU application

The Spanish Tax Agency (AEAT) launched the VERI*FACTU platform on 13 October 2023, providing tools to:  

• Generate and electronically submit invoices for self-employed individuals, professionals, and small businesses
• Consult submitted invoices for tax verification purposes.

In late October 2025, the AEAT issued informational letters to taxpayers about the upcoming invoicing obligations, which were set to take effect in January and July 2026. Recognising the need for more time, the authorities announced a one-year extension to the adaptation deadlines.

New timelines

• 1 January 2027: Spanish-based companies subject to Corporate Tax (excluding companies domiciled in Bizkaia and Navarra, which are subject to local regulations).
• 1 July 2027:Self-employed individuals and permanent establishments of non-established companies in Spain.

Note: Businesses already submitting through Suministro Inmediato de Información (SII) are exempt from the new requirements. SII is mandatory for large companies (≈€6 million turnover) and those in the monthly refund regime, with optional enrollment for other businesses.

VERI*FACTU operating modes

1.VeriFactu Mode (Voluntary Submission):

In this mode, businesses voluntarily submit all invoicing records to AEAT automatically and in real-time.

This mode allows clients to verify their invoices and provides both issuers and recipients access to tax assistance services.

2. No VeriFactu Mode:

This mode does not involve automatic submission but requires strict procedures and controls to ensure the immutability, traceability, and preservation of invoicing records within the electronic system.

Additional invoicing requirements include

• QR Code: Invoices must include a QR code, either on the PDF or any electronic visualisation of the invoice traceability and verification.
• Secure Storage: All invoices must be securely stored to allow for easy retrieval during audits
• Electronic Signature: All invoices must be electronically signed to validate their authenticity.
• Invoice Verification: If an invoice includes the phrase “Invoice verifiable at the AEAT’s electronic headquarters” or “VERI*FACTU”, the recipient must be able to verify whether the invoice has been submitted to AEAT.

Entities that already submit information under the Suministro Inmediato de Información (SII) system are generally exempt from the VERI*FACTU requirements. The VERIFACTU extension gives businesses additional time to adapt systems and processes, while continuing to modernise and secure electronic invoicing in Spain.

Ghana

Mid-year fiscal policy review

Ghana’s government reaffirmed its commitment to VAT reform in the 2025 Mid-Year Fiscal Policy, aiming to make it fairer, simpler and more efficient. A comprehensive VAT reform package has now been submitted to Parliament for approval.

Key measures proposed

• Repeal of the COVID-19 Health Recovery Levy
• Integration of the GET Fund Levy and NHIL into the VAT base, allowing businesses to claim input tax deductions
• Removal of VAT on mineral reconnaissance and prospecting activities
• Increase in the VAT registration threshold from GHS 200,000 to GHS 750,000 (approximately €15,600 to €58,800) (GHS = Ghanaian New Cedi)
• Extension of the VAT zero-rating for locally manufactured textiles until 2028

These reforms are designed to create a more transparent, equitable, and business-friendly tax environment, reducing administrative burdens and supporting compliance.

Sri Lanka

VAT registration threshold

Publish date: 7 November 2025 | Effective date: April 2026

The 2026 Budget, published on 7 November 2025 by the Ministry of Finance, Planning and Economic Development of Sri Lanka, includes a significant change to the VAT registration threshold. This measure is part of broader efforts to expand the VAT base and strengthen revenue collection.

Key change:

• Current VAT registration threshold: LKR 60 million
• New threshold (effective April 2026): LKR 36 million

As a result, businesses with an annual turnover exceeding LKR 36 million will be required to register for VAT starting in April 2026. All businesses should review their turnover forecasts and ensure they are prepared for compliance under the new threshold to ensure a smooth transition next year.

United Kingdom

HMRC launches custom data download via ePortal

Publish date: 13 November 2025 | Effective date: Immediate

On 13 November 2025, His Majesty’s Revenue and Customs (HMRC) published new guidance on accessing customs data for import and export declarations through the dedicated Customs ePortal. This new feature provides businesses with transparent, granular data for each import or export processed by UK Customs.

Eligibility

Only holders of an EORI (Economic Operators Registration and Identification) number may access the service, as they are authorised to perform imports and exports to/from the UK.

Authorised agents or customs declarers may also access the data on behalf of the taxpayer, provided proper authorisation is in place.

The data can be used to:

• Check for accurate reporting
• Support audits or investigations
• Review declarations submitted on the taxpayer’s behalf
• Monitor customs activity over time

Available reports

• Import Item Report: Includes commodity codes, customs values, and duty amounts for each item in an import declaration.
• Import Header Report: Provides a summary of the import declaration, including customs value, invoice amount, and transport costs.
• Import Tax Lines Report: Breaks down taxes, such as customs duties, VAT, and excise duties.
• Export Item Report: Includes commodity codes, values, and export measures for each item in an export declaration.

Data access and delivery

• Data can be accessed for the last 4 years, up to 2 days before the current date
• HMRC processes requests within up to 72 hours.
• Once ready, HMRC sends an email confirmation, and the data is available in CSV format for download.

This new ePortal feature enables businesses and agents to efficiently review, monitor, and verify customs transactions, strengthening compliance and operational oversight.

United Kingdom

Intrastat Threshold for 2026

Publish date: 11 November 2025 | Effective: 1 January 2026

HMRC confirmed on 11 November 2025 that Intrastat reporting thresholds for trade between Northern Ireland and the EU will remain unchanged for 2026.

Thresholds for 2026

• Arrivals: £500,000
• Dispatches: £250,000
• Delivery terms threshold: £24,000,000

These thresholds continue to define the exemption limits for reporting intra-EU trade for businesses operating between Northern Ireland and EU member states.

Businesses can continue using the same thresholds as in 2025, ensuring continuity and simplifying compliance for 2026 reporting.

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