International VAT Rate Round Up: November 2026

Stay ahead of VAT rate changes, policy proposals and emerging compliance considerations with our latest updates from Cyprus, Denmark, Guatemala, Kenya, Poland, Spain, Switzerland, Uruguay and Vietnam

VAT rate changes by country

Cyprus – Temporary zero VAT rate on selected basic items

The Cyprus Taxation Department has published several decrees introducing a temporary zero VAT rate on selected basic items.

Under Decree Κ.Δ.Π. 354/2026 of 30 September 2026, the zero VAT rate applies to:

• Meat and fish from 1 October 2026 to 31 May 2027. Meat and fish preparations still remain subject to the reduced VAT rate of 5%.
• Bread, milk, coffee, sugar and baby food from 12 October 2026 to 31 May 2027

Under Decree Κ.Δ.Π. 362/2026 of 16 October 2026, the zero VAT rate will apply from 1 January 2027 to 31 December 2027, on:

• Fruits and vegetables
• Diapers
• Feminine hygiene protection

Denmark– VAT exemption on books planned from 2027

Denmark plans to abolish VAT on books, including physical books, e-books and audiobooks, from 2027.

The measure was confirmed in the Legislative Programme for the 2026-2027 parliamentary year, published by the Prime Minister’s Office on 6 October 2026. The programme includes tax measures previously announced by the Ministry of Taxation and Growth in June, including:

• Abolishing VAT on books, including e-books and audiobooks
• Abolishing the coffee tax
• Expanding and increasing the employment tax deduction for seniors
• Introducing a tax deduction for exercise and music lessons
• Increasing compensation limits for volunteers
• Giving siblings’ children and close family members equal treatment for estate tax purposes
• Introducing a tax deduction for salary expenses related to software development
• Increasing the standard deduction for daycare providers
• Introducing more flexible rules for paying land registration fees when registering the electricity grid and related infrastructure.

The measures are expected to take effect from 2027.

Guatemala – Temporary VAT exemption on fuels from 1 October to 31 December 2026

Guatemala has introduced a temporary VAT exemption on the import and domestic sale of selected fuel products.

The Emergency Temporary Consumer Tax Exemption Act, published in the Official Gazette on 30 September 2026, applies from 1 October to 31 December 2026.

The temporary VAT exemption applies to:

• Superior gasoline
• Regular gasoline
• Diesel and oil gas
• Fuel alcohol

During this period, imports of these fuels won’t be subject to import VAT and domestic sales will also be exempt from VAT.

The temporary exemption will expire on 31 December 2026. From 1 January 2027, the affected fuel products will automatically return to the ordinary VAT regime, with no further legislative action required.

Kenya– VAT reduction on selected fuels extended until January 2027

Kenya has extended the reduced VAT rate on selected petroleum products for a further 90 days. The affected products will continue to be taxed at 8% instead of the standard 16% rate until 12 January 2027.

The extension was included in National Assembly Bill No. 65, published on 8 October 2026 in Supplement No. 236 to the Kenya Gazette. The measure aims to reduce the impact of rising global fuel prices on consumers.

The reduced 8% VAT rate applies to the following products listed in the First and Second Schedules to the VAT Act:

• Motor spirit (premium gasoline), code 0001.13.01 and tariff code 2710.12.20
• Illuminating kerosene, code 0001.13.02 and tariff code 2710.19.22
• Gas oil (automotive light amber diesel for high-speed engines), code 0001.13.03 and tariff code 2710.19.31.

The reduced rate originally took effect on 15 April 2026 for an initial 90-day period. This is the second extension, with the measure currently set to expire on 12 January 2027.

Poland– Temporary VAT cut on motor fuels extended until December 2026

The Polish Government has extended the temporary reduction in VAT on selected motor fuels until 31 December 2026. The affected fuels will continue to be taxed at 8% instead of the standard 23% rate.

The reduced rate initially applied for two weeks, from 17 to 31 August 2026. It was subsequently extended until 30 September and has now been extended until the end of 2026.

The reduced 8% VAT rate applies to:

• Petrol under Combined Nomenclature (CN) codes 2710 12 45 and 2710 12 49, as well as products created by blending these fuels with biocomponents, provided they meet the quality requirements set out in separate regulations
• Diesel under CN codes 2710 19 42, 2710 19 44 and 2710 20 11, as well as products created by blending these oils with biocomponents, provided they meet the relevant quality requirements
• Biocomponents used as pure fuels to power internal combustion engines, regardless of the CN code, provided they meet the quality requirements set out in separate regulations.

The measure forms part of the Polish Government’s CPN programme to reduce fuel prices and follows an earlier VAT reduction that applied from 31 March to 30 June 2026.

Spain– 10% VAT to apply on short-term rentals from December 2026

Spain is introducing new VAT rules for short-term furnished accommodation from 1 December 2026.

Under Royal Decree-Law 29/2026 of 7 October 2026, which amends the Spanish VAT Act (Law 37/1992), the existing VAT exemption will no longer apply where furnished apartments or homes are rented to the same tenant for 30 consecutive nights or fewer.

These rentals will instead be subject to the reduced VAT rate of 10%. This includes typical short-term tourist accommodation, such as Airbnb-style holiday rentals.

Previously, these rentals were generally exempt from VAT unless the landlord provided hotel-type services, such as cleaning during the stay, linen services, restaurant services or similar hospitality-related services.

The VAT exemption will continue to apply where the short-term rental takes place in a property that is the landlord’s habitual residence.

From 1 December 2026, property owners providing qualifying short-term furnished accommodation may need to:

• Register for VAT
• Charge 10% VAT on qualifying rentals
• Comply with Spanish VAT reporting obligations.

Switzerland – 3.8% VAT rate for accommodation extended until 2031

Switzerland has taken a final step towards extending the special 3.8% VAT rate for accommodation services until 31 December 2031.

The Federal Assembly adopted an amendment to the Federal Act on VAT Act on 2 October 2026.

The extension is shorter than originally proposed. On 15 April 2026, the Federal Council recommended extending the special VAT rate until 31 December 2035. During the legislative process, Parliament instead agreed to extend it until the end of 2031.

The amendment remains subject to Switzerland’s optional referendum procedure. Interested parties have until 21 January 2027 to request a referendum.

If no referendum is requested, the new rules will take effect on 1 January 2028.

Switzerland – Proposed VAT increase from 2028 subject to referendum

Switzerland is considering an increase in VAT to help partially finance the 13th Old-Age and Survivors’ Insurance (AHV) payment. The proposal is subject to a referendum on 29 November 2026, with the Federal Council recommending a vote in favour.

Under the proposal:

• The standard VAT rate would increase by 0.4 percentage points, from 8.1% to 8.5%
• The special VAT rate for accommodation services would increase by 0.2 percentage points, from 3.8% to 4.0%
• The reduced VAT rate for everyday goods would remain unchanged at 2.6%.

An earlier proposal in mid-August would have increased the standard rate to 8.6% and the special accommodation rate to 4.1%. This proposal did not receive sufficient support.

If approved, the VAT increase isn’t expected to take effect before 2028.

Uruguay – Reduced VAT rate for tourism extended until April 2027

Uruguay has extended its reduced VAT regime for qualifying tourism services until 30 April 2027.

The Government signed Decree No. 235/026 on 1 October 2026, extending the measure that was due to expire on 30 September 2026. The regime was originally introduced in 2021 and has since been extended several times.

Which tourism services qualify?

Under the regime, qualifying tourism services benefit from a nine percentage-point VAT reduction, reducing the effective VAT burden from the standard 22% rate to 13%, provided payment is made electronically using methods such as credit cards, debit cards or electronic money.

The reduction applies to:

• Restaurants, bars and cafés
• Catering and event-related services
• Entertainment and event services
• Car rental services without a driver
• Certain real estate mediation services linked to tourism.

The extension aims to continue supporting Uruguay’s tourism sector while maintaining economic activity and regional competitiveness.

Vietnam – Fuel VAT relief extended until December 2026

Vietnam has extended temporary tax relief for petrol, diesel and aviation fuel until 31 December 2026, as part of measures to mitigate the impact of rising fuel prices.

The Government of Vietnam issued Resolution No. 43/2026/NQ-CP on 30 September 2026, extending preferential import tax, environmental protection tax and VAT measures for petrol, diesel, aviation fuel and raw materials used to produce petrol and diesel. The Resolution took effect on 1 October 2026.

Under the temporary measures, petrol, diesel and aviation fuel continue to benefit from reduced or zero tax rates and exemptions.

The preferential treatment was initially introduced from 26 March to 15 April 2026. It was subsequently extended to 30 June 2026, then 30 September 2026 and has now been extended until 31 December 2026.

Unless the preferential regime is extended again, the VAT rate for the affected products is expected to return to 8% from 1 January 2027.