The November edition of our International VAT Rate Round Up highlights the latest updates from Bhutan, Denmark, Ecuador, Greece, Italy, Kazakhstan and the Philippines.
Bhutan
On 18 June 2025, the National Assembly of Bhutan adopted the Goods and Services Tax (Amendment) Bill of Bhutan 2025, replacing the previous 7% Sales Tax with a 5% Goods and Services Tax (GST).
Several essential goods will remain exempt from GST, including:
- Rice
- Cooking oil
- Salt
- Feminine hygiene products
- Electronic wheelchairs for persons with disabilities
The Bill has been sent to the National Council for further review and is scheduled to take effect from 1 January 2026.
Denmark
The Draft Budget Finance Bill 2026 (Finanslovforslaget 2026), published on 29 August 2025, proposes to eliminate Value Added Tax (VAT) on all types of books.
Under the proposal, printed books, e-books, and audiobooks will be exempt from VAT.
This aligns Denmark with other countries such as Ireland, Sweden and Norway, which have already reduced or abolished VAT on books to promote reading and cultural accessibility. The measure is expected to result in a minor revenue loss, estimated at approximately DKK 170 million in 2026, and DKK 340 million annually from 2027 onwards, after accounting for behavioural effects and recoupment.
Ecuador
By Executive Decree No. 179, issued on 7 October 2025, Ecuador temporarily reduced the general VAT rate from 15% to 8% for all tourism-related services during the following national holidays:
- Independence festivities of Guayaquil: 9–11 October
- Day of the Dead and Independence of Cuenca: 1–4 November
Earlier in 2025, the President removed the previous 12-day limit on the temporary VAT reduction applied during national holidays, allowing businesses and consumers to benefit from the 8% VAT rate more frequently throughout the year.
The reduced VAT rate applies to the following tourism-related services:
- Accommodation
- Food, beverages and entertainment
- Tourist agency services
- Tourist transportation
- Event organisation (congresses, conventions, meetings, incentives, conferences, fairs and exhibitions)
- Convention centres, reception halls and banquet halls
- Tourist guidance services
- Community tourism centres
- Theme parks and permanent attractions
- Spas, hot springs and tourist recreation centres
Greece
The Greek Parliament has introduced a draft bill titled “Tax Reform for Demographics and the Middle Class – Support Measures for Society and the Economy”, which includes VAT rate reductions for remote islands with low populations.
Key points of the proposal:
- A 30% reduction in VAT rates is proposed for islands with populations of up to 20,000 inhabitants, specifically located in:
- The North Aegean Region
- The Prefecture of Evros (Samothrace)
- The Dodecanese Prefecture
- Proposed VAT changes:
- Standard VAT rate will decrease from 24% to 17%
- Reduced VAT rate will decrease from 13% to 9%
- Rates are rounded to the nearest whole unit, with 0.5 rounded up
The second reading of the bill is scheduled for 5 November 2025 and if approved, the new VAT rates will take effect from 1 January 2026.
Italy
Italy has requested, and the European Commission has proposed, a further three-year extension of the special measures limiting the deduction of input VAT to 40% on certain motor vehicle expenditures not wholly used for business purposes.
The restriction applies to expenditures related to:
- Purchase of vehicles, including assembly contracts and similar arrangements
- Manufacture
- Intra-Community acquisition
- Importation
- Leasing or hire
- Modification, repair, or maintenance
- Supplies or services linked to vehicle use, including lubricants and fuel
The measure does not apply to vehicles in the following categories:
- Vehicles forming part of the taxable person’s stock-in-trade
- Vehicles used as taxis
- Vehicles used for driving instruction
- Vehicles used for hire or leasing
- Vehicles used by sales representatives
Following Italy’s submission to the European Commission on 31 March 2025, the Commission confirmed receipt of all necessary information on 31 July 2025. Recognising the measure’s positive impact, the Commission proposed a Council Implementing Decision on 24 October 2025 to extend the limitation until 31 December 2028.
Italy will need to submit a further extension request by 31 March 2028, accompanied by a report justifying the continued application of the restriction.
Kazakhstan
On 28 October 2025, Kazakhstan announced new regulations concerning the taxation and customs duties for goods purchased by individuals from foreign online platforms. These rules will come into effect upon the entry into force of the Protocol on Amendments to the EAEU Customs Code on Foreign Electronic Commerce.
Introduction of VAT and Customs Duty on E-Commerce Goods
- Goods purchased from foreign online stores outside the Eurasian Economic Union (EAEU), such as those based in China, the United States, or European Union countries, will be subject to:
- 12% VAT
- 5% customs duty levied on e-commerce orders exceeding €200 in value.
Duty-Free Threshold
- The duty-free import threshold for e-commerce goods remains at €200.
- Purchases below this threshold are exempt from customs duties and VAT.
Customs Duties and VAT for Orders Above €200
- For goods exceeding €200, the following applies:
- 5% customs duty on the value of the goods
- 12% VAT on the value of the goods
Comparison with Previous Regime
Under the prior rules for personal goods, orders exceeding €200 were subject to a 15% duty on the excess value (including VAT) plus a minimum fee of €2 per kilogram for items over 31 kg.
These reforms aim to modernise Kazakhstan’s e-commerce tax framework, ensure fair taxation of imported goods, and align customs duties with international e-commerce standards.
Philippines
In early September 2025, House Bill No. 4302 was filed with the House of Representatives, proposing a reduction of the current 12% VAT rate to 10%.
- The Bill has been pending with the Committee since 8 September 2025.
- If approved, the new VAT rate will take effect 15 days after its publication in the Official Gazette.
This proposal forms part of ongoing discussions on tax relief measures aimed at supporting businesses and consumers in the Philippines.
International VAT Rate Round Up: October 2025
If you missed last month’s VAT rate announcements or VAT threshold changes, you can catch up now.
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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 21 years VAT experience behind her, Lisa has managed VAT compliance issues and solutions globally for over 11 years. Fintua have 12,000 + corporate clients in over 109 countries and many of these are members of the Fortune 500.
