Digital Transformation of VAT Systems
-
EU: Adopts VAT in Digital Age (ViDA) package mandating digital B2B reporting by 2030, platform VAT liability for short-term accommodations, and expanded one-stop-shops.
-
Greece: Receives authorization to implement mandatory B2B e-invoicing via myDATA platform from July 2025 through December 2027.
-
Turkey: Increases minimum input VAT refund claim amount from TRY 2,000 to TRY 10,000 effective April 2025.
Pillar 1 & 2 Implementation Progress
-
Finland: Issues comprehensive Pillar 2 guidance covering QDMTT, IIR, UTPR, and transitional provisions incorporating OECD administrative guidelines through June 2024.
-
Turkey: Announces decision not to apply Pillar 1 Amount B simplified approach for baseline marketing and distribution activities.
-
Switzerland: Clarifies treatment of permanent establishments under GloBE rules, addressing Swiss legal distinction between entities and PEs.
Women’s Economic Empowerment Initiatives
-
Ecuador: Introduces comprehensive incentives for women entrepreneurs including 150% deduction for funding female-led programs, reduced corporate rates, tax credits, and rural area exemptions.
Tax Rate Adjustments and Reforms
-
South Africa: Provides detailed guidance on VAT rate increase from 15% to 15.5% effective May 2025, with further increase to 16% planned for April 2026.
-
Lithuania: Considers increase in reduced VAT rate from 9% to 12% while maintaining 21% standard and 5% super-reduced rates.
-
Estonia: Plans to repeal 2% security tax on company profits before its 2026 implementation date.
Industry-Specific Tax Relief
-
Ghana: Abolishes multiple taxes including 10% betting tax, 1% E-Levy, emission levy, and COVID-19 levy. Increases mining sector Growth & Sustainability Levy from 1% to 3%.
-
Chile: Implements sliding tax scales for mining SMEs: 1-4% for artisan miners and 4-20% for larger SMEs based on precious metal market prices.
-
Canada: Extends 15% Mineral Exploration Tax Credit for flow-through shares until March 2027, providing $110 million support for exploration investment.
Insights:
The EU’s adoption of the ViDA package signals a pivotal turning point in tax administration, moving beyond simple digitization toward a comprehensive transformation of VAT systems. This marks the beginning of a new era where tax infrastructure is deliberately designed for digital commerce rather than merely adapting to it.
The emergence of gender-specific tax policies in Ecuador represents a fascinating evolution in tax policy design, using fiscal tools to address gender disparities. This suggests tax systems are increasingly being viewed as instruments for targeted social change beyond traditional revenue collection or economic steering.
The trend of tax consolidation and simplification seen in Ghana and Estonia reflects growing recognition of administrative burden costs, signaling a shift toward quality of tax systems over quantity of tax instruments.
As these developments unfold simultaneously across diverse economies, we’re witnessing the emergence of a more nuanced approach to taxation that carefully balances competing objectives of revenue needs, economic development, social goals, and administrative efficiency.
