International VAT Rate Round Up: October 2026

Stay ahead of VAT rate changes, policy proposals and emerging compliance considerations with our latest updates from Ecuador, Japan, Macedonia, Poland, Portugal and Switzerland

VAT rate changes by country

Ecuador – Reduced VAT rate from 15% to 8% on tourist activities during national holiday

A reduction of the general VAT rate to 8% (from 15) was announced with Executive Decree No. 465 for the provision of all tourist services in relation to the National Holiday of 10 August.

The 8% VAT apply to selected services on the National Holiday on Monday, 10 August and the preceding weekend, 8 and 9 August.

The activities defined as tourist services to which the VAT rate reduction applies are:

• Accommodation
• Food, beverages and entertainment
• Tourist agency
• Tourist transportation
• Event organisers, congresses and conventions, meetings, incentives, conferences, fairs, and exhibitions
• Convention centres, reception halls and banquet halls
• Tourist guidance
• Community tourism centres
• Theme parks and permanent attractions
• Spas, hot springs and tourist recreation centres

Businesses providing these qualified services are required to issue sales documents applying the 8% VAT rate.

Japan – Proposed temporary reduction of consumption tax on food and beverages to 1%

On 15 September 2026, The National Tax Agency (NTA) published an outline describing a proposed temporary reduction of Japan’s consumption tax rate on qualifying food and beverages from 8% to 1%.

Under the proposal, the 1% rate would apply for a two-year period from 1 April 2027 to 31 March 2029.

The reduced rate would apply to transactions that currently qualify for Japan’s existing reduced consumption tax regime, including:

• Transfers and leases of qualifying food and beverages;
• Imports of qualifying food and beverages; and
• Withdrawals of qualifying food and beverages from bonded areas.

The NTA has clarified that the published outline is a policy proposal only and has not yet been enacted into law. The measures would apply only if the relevant legislation is submitted to the Diet, approved, and subsequently enacted.

Until the necessary legislation is passed, the current reduced consumption tax rate of 8% remains in force.

Macedonia – Further reduction of VAT on certain fuels until 12 October 2026

In September 2026, the Macedonian Government introduced an additional measure to address rising fuel prices by reducing the VAT rate on certain fuels from the standard 18% to 10% with effect from 15 September, as published in the Official Gazette (Службен весник на РСМ No. 214/26).

The measure was initially effective until 28 September 2026 and was subsequently extended until 12 October 2026 (РСМ No. 228/26).

This follows an earlier temporary VAT reduction on the same fuels, which was in effect from 24 March to 1 June 2026.

Unless further measures are introduced, the VAT rate on the affected fuels is expected to revert to the standard 18% rate after 12 October 2026.

Poland– VAT increase on non-alcoholic beverages from 1 January 2027

On 22 September 2026, the Ministry of Finance announced that the Council of Ministers had approved a draft amendment to the VAT Act increasing the VAT rate on certain non-alcoholic beverages.

The measure will increase the VAT rate on selected non-alcoholic beverages containing at least 20% fruit juice, vegetable juice or a combination of fruit and vegetable juice.

The amendement also aims to harmonise the VAT treatment of non-alcoholic beverages that are equivalent to alcoholic drinks, ensuring that products such as non-alcoholic beers are subject to the same VAT rate regardless of whether they contain fruit or vegetable juice.

The VAT increase will also affect beverages containing added caffeine or taurine.

As a result, the affected products will move from the preferential VAT rates of 5% and 8% to the standard VAT rate of 23%.

The new regulations are expected to enter into force on 1 January 2027.

Portugal– Proposed temporary VAT reductions on fuel and essential food products rejected

On 18 September 2026, two bills were submitted to the Portuguese Parliament proposing temporary VAT relief measures aimed at addressing the impact of rising living costs.

Bill No. 757/XVII/2 proposed a temporary reduction of the VAT rate applicable to certain road fuels from the standard rate of 23% to the intermediate rate of 13% for an initial period of 12 months.

The reduced VAT rate would have applied to:

• Petrol and diesel
• Other liquid fuels intended for road use, under conditions to be defined subsequently.

The bill proposed the temporary application of a 0% VAT rate to a basket of essential food products in order to alleviate the effects of rising living costs and food inflation.

The zero rate would have applied to a range of essential foodstuffs, including:

• Bread
• Milk
• Fruit
• Vegetables
• Rice
• Pasta
• Olive oil
• Meat
• Fish
• Eggs

Both Bills were voted on and rejected by the Portuguese Parliament on 24 September 2026.

Switzerland– Proposed temporary VAT increase to support security and defence spending from 2028

To finance the urgent need to strengthen security and defence in Switzerland, the Swiss government is working on a 12-year VAT increase. The Federal Council proposes starting in 2028.

• 0.5% increase of the standard VAT rate from 8.1% to 8.6%
• 0.3% increase of the special rate for accommodation services, provided Parliament approves the extension beyon 2027, from 3.8% to 4.1%
• No change to the reduced rate of 2.6%

The Federal Council published the announcement on 12 August 2026 along with the relevant draft laws.

Authors

Lisa Dowling

Chief Tax & Client Enablement Officer at Fintua

Lisa is the Chief Tax & Client Enablement Officer at Fintua and a recognised expert in international VAT compliance and digital tax transformation. With more than 24 years of VAT experience, she leads Fintua’s global tax strategy, regulatory intelligence and customer & partner enablement. Lisa is a regular speaker at international tax and finance events, sharing insights on regulatory change, digitisation and the future of global compliance. At Fintua, she helps organisations navigate regulatory change and simplify compliance in an increasingly digital tax landscape.