Digital Transformation of Tax Administration
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EU Council: Agrees on VAT in Digital Age package: mandatory e-invoicing for cross-border B2B by 2030, platform economy VAT liability changes, expanded One-Stop-Shop by 2035.
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Latvia: Mandates e-invoicing for B2B transactions from January 2026, with detailed regulations due by July 2025.
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Poland: Sets phased KSeF e-invoicing mandate: February 2026 for businesses with PLN 200M+ sales, April 2026 for others, transitional period until September 2026 for small taxpayers.
Tax Regimes Evolution
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Spain: Ends energy sector windfall tax following project suspensions; extends banking sector tax for three years with new progressive rates of 1-6% replacing 4.8% flat rate.
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Slovak Republic: Reintroduces minimum tax with tiered structure: EUR 340-3,840 based on revenue thresholds, with 50% reduction for employers of disabled workers.
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Kenya: Proposes Significant Economic Presence Tax at 6% replacing 1.5% Digital Service Tax, expanding scope to ride-hailing, food delivery, and freelance services.
Global Tax Framework Adaptation
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Indonesia: Extends tax holiday for pioneer industries through 2025, adds Pillar 2 provision requiring domestic minimum top-up tax for qualifying MNEs from January 2025.
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Kenya: Introduces 15% Minimum Top-up Tax for MNEs with annual turnover exceeding KES 100 billion.
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Portugal: Enacts Pillar 2 legislation with IIR/QDMTT from 2024, UTPR from 2025.
Strategic VAT Adjustments
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Cyprus: Implements zero VAT rate until December 2025 for essential items including baby milk, hygiene products, fresh produce.
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EU: Agrees platforms to collect VAT on short-term accommodation and passenger transport, with SME exemption option for member states.
Investment Incentive Refinement
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Argentina: Implements RIGI scheme regulations: 25% corporate tax rate for 30 years on USD 200M+ investments, with VAT credits and transfer pricing provisions.
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Philippines: Highlights Create More Act incentives for British investors, pending enactment after September 2024 Senate approval.
Insights:
This week marks a significant shift in global tax administration, with the EU’s DAC9 proposal exemplifying a move toward streamlined compliance mechanisms. The simultaneous adoption of Pillar 2 by diverse economies like South Africa suggests we’re entering an era of ‘coordinated autonomy’ in global tax implementation.
Environmental taxation is evolving beyond simple carbon pricing, as evidenced by China’s sophisticated water resource tax and Denmark’s nuanced approach to carbon leakage prevention. This signals a shift toward more granular, resource-specific environmental fiscal policies.
The overhaul of non-dom taxation in the UK, coupled with widespread income tax recalibrations across jurisdictions, indicates a broader trend toward modernizing traditional tax structures while balancing mobility and fairness concerns.
The rapid evolution of cross-border tax compliance, particularly in digital reporting and transfer pricing, suggests we’re approaching a tipping point where technology-driven compliance becomes the norm rather than the exception. Chile’s comprehensive reforms particularly exemplify this trend toward sophisticated, internationally-aligned tax frameworks.
