The April edition of our International VAT Rate Round Up highlights the latest updates from Croatia, Iceland, Kenya, Liberia, Macedonia, Poland and Vietnam.
This month’s update sees several jurisdictions implementing temporary or proposed VAT rate changes to address inflationary pressures or fund policy priorities, particularly in fuel and essential goods.
Croatia
Croatia has extended the 5% reduced VAT rate in the energy sector until 31 March 2027. The extension was published in the Croatian Official Gazette (NN 32/2026).
This measure applies to both individuals and businesses and covers the supply of natural gas and heating from thermal stations, including associated fees. It also applies to the supply of firewood, pellets, briquettes and wood chips.
If no further extension is granted, the VAT rate on these supplies will increase to 13% as of 1 April 2027.
The extension maintains the current level of tax relief and helps mitigate potential increases in energy prices for consumers and businesses in Croatia.
Iceland
Iceland has introduced a temporary reduction in VAT on fuel sold at the pump, as part of wider economic measures to ease inflationary pressure and rising oil prices linked to the conflict in the Persian Gulf.
What has changed:
- The standard VAT rate on fuel has been reduced from 24% to 11%.
- The reduced rate applies for a fixed period from 1 May to 31 August 2026.
- The measures were announced by the Icelandic Government on 10 April 2026.
Following the Cabinet’s announcement, an amendment to the VAT Act was subsequently adopted by Parliament on 29 April 2026 to give legal effect to the measure.
Businesses operating in the fuel sector should ensure that pricing systems and VAT reporting processes are updated accordingly for the duration of the temporary rate reduction.
Kenya
Kenya has introduced a temporary reduction in VAT on petroleum products, following the adoption of the VAT Amendment Bill (National Assembly Bill No. 21 of 2026) by Parliament on 10 April 2026.
On 10 April 2026, the Kenyan Parliament passed the VAT Amendment Bill (National Assembly Bill No. 21 of 2026), introducing a temporary reduction of VAT on petroleum products from 16% to 8%.
The measure is intended to ease the impact of rising global fuel prices on consumers.
The reduced VAT rate applies to petroleum products classified under the tariff codes specified in the First and Second Schedules of the VAT Act, including:
- 0001.13.01 – Motor spirit (gasoline) premium (tariff 2710.12.20)
- 0001.13.02 – Illuminating kerosene (tariff 2710.19.22)
- 0001.13.03 – Gas oil (automotive, light, amber for high-speed engine) (tariff 2710.19.31)
The Act is deemed to have come into effect on 15 April 2026 and will apply for an initial period of 90 days, expiring on 14 July 2026.
The Cabinet Secretary is empowered to extend the measure for a further 90 days, potentially extending its application until 13 October 2026.
Businesses supplying petroleum products should ensure that invoicing, pricing and VAT reporting accurately reflect the reduced rate for the applicable period.
Liberia
On 7 April 2026, the Government of Liberia announced an increase in the Goods and Services Tax (GST) rate from 12% to 13%, effective 1 May 2026.
The measure is intended to support a more transparent and inclusive economy, while aligning the tax system with Liberia’s evolving development needs.
The Government further confirmed that exports will continue to be zero-rated, and that the 15% GST rate applicable to telecommunications services remains unchanged.
Liberia
On 13 April 2026, the Liberian Tax Authority published a Revenue Notice as part of its VAT awareness campaign announcing the upcoming introduction of VAT
Under the new regime, VAT will be implemented at a standard rate of 15% from 1 January 2027, replacing the current Goods and Services Tax (GST) rate of 13%.
VAT registration will open in July 2026.
Businesses and individuals will have a six-month transitional window, running until 31 December 2026, to register under the new VAT system.
The introduction of VAT follows the enactment of the law entitled An Act to Amend Part 3, Chapter 10 of the Liberia Revenue Code of 2000, which provides the legal basis for replacing the existing GST framework with a VAT system.
Macedonia
At the end of March 2026, the Macedonian Government published a measure in the Official Gazette (Службен весник на РСМ No. 60/26) introducing a temporary reduction of the VAT rate on certain fuels from 18% to 10%.
The measure was adopted in response to elevated fuel prices linked to the conflict in the Middle East.
The reduced VAT rate was initially applicable until 6 April 2026 but has since been extended multiple times.
The measure is currently in force until 4 May 2026.
Poland
The Polish government has announced an extension of the reduced VAT rate applicable to petrol, diesel and biocomponents used as standalone fuels until 15 May 2026.
The measure reduces the VAT rate from 23% to 8% and was initially introduced at the end of March 2026, with an original expiry date at the end of April 2026.
The extension forms part of the government’s CPN programme, aimed at mitigating fuel price pressures through temporary fiscal relief measures, including adjustments to VAT and excise duty.
It is also noted that the initial draft legislation had proposed a longer application period, from 15 March 2026 to 30 June 2026.
Vietnam
To address rising fuel prices, the Government of Vietnam issued Decision No. 482/QD-TTg, effective from 26 March 2026, introducing temporary relief measures through adjustments to Environmental Protection Tax, VAT, and Excise Duty.
Under this Decision, petrol, diesel, and jet fuel were subject to zero rates or exemptions from the relevant taxes for the period from 26 March to 15 April 2026.
Subsequently, on 12 April 2026, the National Assembly adopted Resolution No. 19/2026/QH16, which extended the application of these tax relief measures until 30 June 2026.
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Authors
Lisa Dowling
Specialising in International VAT Compliance solutions, Lisa brings a wealth of knowledge and insight in her dealings with a host of international clients ranging from start-ups through to multinationals. With 24 years VAT experience behind her, Lisa has managed VAT compliance issues and solutions globally for over 14 years. Fintua have 12,000 + corporate clients in over 109 countries and many of these are members of the Fortune 500.
