Weekly VAT News

Please join our webcast on 11 February 2026, 13:30 – 14:30, where we will explore indirect tax topics impacting financial services businesses across Europe.

Our panellists from across the region will discuss the latest court rulings on debt financing, new perspectives on VAT and transfer pricing – including the CJEU AG’s recent opinion in Stellantis – as well as the UK Supreme Court’s judgment in Hotel La Tour.

Please register for this event here.

For further information please contact Roshni Shah.

EY is co-hosting an in-person e-invoicing event with Edicom on 4 March, 10 – 14:30, at our 1 More London Place office, London, SE1 2AF.

The event will include:

• A plenary overview session with EY and Edicom
• A panel discussion covering key upcoming mandates such as France and the UK. (HMRC will be part of this panel to provide specific insight on the plans for the UK and answer questions)
• A client case study with Kellanova which will cover their experience in selecting and implementing an e-invoicing provider
• Roundtable discussions running concurrently covering various e-invoicing topics aligned to the attendee’s choice of subject

This event will be particularly insightful for:

• Tax, Finance, and IT Leaders seeking to deepen their understanding of forthcoming e-invoicing mandates
• Tax Transformation Leads overseeing the adoption of e-invoicing.
• Companies exploring options to consolidate their disparate e-invoicing systems and streamline compliance processes

Should you wish to attend (and for further information on how to register) please contact Ruby Buckland.

Trade Talking Points is our fortnightly newsletter on the latest insights from EY's Trade Strategy team.

In this edition we provide UK, US and EU trade policy updates, as well as an update on the World Customs Organisation Harmonised System.

For further information please contact Marc Bunch, Ross Freeman, Will Main or Vikita Vaghela.

Our latest edition of TradeFlash, available here, highlights key global trade updates, provides practical guidance on emerging compliance trends, and provides access to EY thought leadership, including articles, webcasts and podcasts. These resources are designed to help you stay informed and ahead of change.

A joint statement has been published from the US and India confirming details and the key terms of their ‘Interim Agreement’ on trade. An Executive Order confirms that the additional US tariffs imposed on India in relation to the purchase of Russian oil are no longer in place.

An Executive Order has been published in relation to Cuba. The Order imposes tariffs on good from countries that sell or otherwise provide oil to Cuba. The US Government factsheet is available here. The countries which may be impacted, and the rate of tariffs, are not yet known. The Secretary of Commerce, in consultation with the Secretary of State, will determine which countries are impacted and then the tariff rate, if any, will be determined in consultation with the Secretary of the Treasury, the Secretary of Commerce, the Secretary of Homeland Security, and the United States Trade Representative.

An Executive Order has been signed imposing 25% tariffs on goods imported into the United States that are products of any country that directly or indirectly purchases, imports, or otherwise acquires any goods or services from Iran.

For further information please contact Marc Bunch or Ross Freeman.

Wednesday 11 February

Judgment – T-643/24 Credidam

Topics – Copyright and related rights – communication to the public of protected works – supply of services

A Romanian referral which asks whether VAT is due in a situation of tortious civil liability concerning copyright and related rights. On a proper construction of Article 2(1)(c), Article 24(1), and Article 25(a) of the VAT Directive, do holders of related rights carry out a supply of services for consideration where the user carries out a communication to the public of protected works in the absence of a licence to that effect.

Judgment – T-689/24 Dyrektor Krajowej Informacji Skarbowej

Topics – Deduction of VAT without an invoice

A Polish referral which asks whether Articles 167, 168(a) and 178(a) of the VAT Directive and the principles of fiscal neutrality, effectiveness and proportionality must be interpreted as precluding a provision of national law under which a taxable person may not assert the right to deduct input tax in a return submitted for a period in which that person met the substantive conditions for exercising that right if, during that period, he or she had not yet received an invoice, even though that person did receive the invoice before submitting the return.

Wednesday 25 February

Opinion – T-184/25 Veronsaajien oikeudenvalvontayksikkö (Exonérations – gestion de crédits effectuée par celui qui les a octroyés)

Topics – VAT exemption – management of credit

A Finnish referral which asks whether Article 135(1)(b) of the VAT Directive, which concerns the exemption from tax of the management of credit by the person granting it, is to be interpreted as also covering the case where an undertaking continues to manage credit which it has itself granted and has sold to another financial institution. If the answer to the first question is in the negative and the management of credit by the former undertaking concerns credit serving to secure a bond issued by another financial institution, is Article 135(1)(c) of the VAT Directive, which concerns the exemption from tax of any dealings in credit guarantees or any other security for money, to be interpreted as also covering the case where the former undertaking manages credit serving to secure a bond issued by another financial institution. If the answer to the second question is in the negative, is Article 135(1)(d) of the VAT Directive, which concerns the exemption from tax of transactions concerning debts, to be interpreted as also covering the case where the former undertaking manages debts transferred to another financial institution.

Judgment – T-575/24 Digipolis

Topics – VAT Liability for commissioning association participants

A Belgian referral which asks whether Articles 2, 9 and 13 of the VAT Directive and the principle of neutrality are infringed if those provisions are interpreted as meaning that, by joining a commissioning association, participants who have made a conferral of management are not liable for VAT when they avail themselves of the services of the commissioning association since, in the context of the conferral of management, the latter is deemed to be acting in place of its members, with the result that services provided by the commissioning association to the participants are deemed to be services provided to itself and thus there is no participation in trade/taxable transactions.

Judgment – T-638/24 Finanzamt Österreich (Acquisition and livraison intracommunautaires – double imposition)

Topics – Acquisitions, place of supply

An Austrian referral regarding the taxation of an intra-Community acquisition of goods, within the meaning of Article 20 of the VAT Directive where the Member State in which dispatch or transport of the goods began has taxed that acquisition, pursuant to Article 41, on the ground that the customer has used the VAT identification number of that Member State and has not established that VAT has been applied to the transaction in the Member State in which the dispatch or transport ends.

Hearing – T-356/25 Rapera

Topics – Joint and several liability of tax representatives

A Greek referral which seeks clarification regarding Articles 204 and 205 of the VAT Directive and the principle of proportionality regarding joint and several liability of tax representatives (who merely submit VAT returns), particularly whether national laws can impose such liability without assessing the representative’s involvement in the taxable activities. The case hinges on national provisions which stipulate that a tax representative can be held jointly liable for VAT obligations without requiring evidence of their involvement in the taxable person’s economic activities.

Thursday 5 March

Judgment – C-409/24 J-GmbH (Application sélective du taux réduit de TVA), C-410/24 Blapp (Application sélective du taux réduit de TVA) and C-411/24 D GmbH (Application sélective du taux réduit de TVA)

Topics – Reduced tax rate for the letting of living and sleeping space – inclusion of ancillary supplies

Joined German referrals which ask whether Article 24(1) and Article 98(1) and (2) of the VAT Directive, read in conjunction with Category 12 of Annex III, are to be interpreted as meaning that they preclude a national provision under which a Member State may exclude, by means of a national requirement to break down transactions for tax purposes, supplies from the reduced tax rate provided for by the Member State for the letting of living and sleeping spaces offered by a trader for the short-term provision of accommodation, where the supplies do not directly serve the letting purpose but are remunerated by the consideration for such letting, even if those supplies are dependent supplies ancillary to the short-term provision of accommodation.

Judgment – C-436/24 Lyko Operations

Topics – Definition of ‘voucher’ for VAT purposes – instrument in the form of points

A Swedish referral which concerns the definition of ‘voucher’ for VAT purposes, in particular, whether an instrument in the form of points constitutes a voucher as defined in Article 30a of the VAT Directive, where the points are awarded under a customer loyalty programme (loyalty programme) designed in such a way that a customer who purchases goods obtains points according to the size of the purchases and is then entitled, when making a future purchase, to use the points to obtain further goods from the seller’s range. How is the taxable amount under Article 73a to be determined when the points are used to obtain goods from the seller.

Judgment – C-472/24 Žaidimų valiuta

Topics – Sale of ‘gold’ within computer games

A Lithuanian referral concerning the VAT treatment of transactions relating to the sale of ‘Gold’ from the computer game ‘Runescape’. The referring Court asks whether the sale of ‘Gold’ from the game falls within the scope of the exemption provided by Article 135(1)(e) of the VAT Directive. If the answer to the first question is in the negative, what should its taxable value be.

Thursday 12 March

Judgment – C-515/24 Randstad España

Topics – Deductibility of entertainment expenses if linked to business activity

A Spanish referral concerning input VAT on expenditure arising from client entertainment. Is domestic legislation consistent with Article 168(a) and Article 176, first paragraph, of the VAT Directive where no proportion of VAT incurred on expenses, such as tickets for sporting events, or those used to show appreciation for clients, salaried employees or third parties, is deductible, even if the taxpayer proves that such expenditure is directly related to his or her business or professional activity, that it had a strictly business or professional purpose and that the goods and services were used by the taxable person to carry out taxable transactions, and even though the amount of such expenditure is tax deductible for the purposes of income taxes (personal income tax and corporation tax). Is such a rule permitted where that rule entered into force the same day that Spain joined the European Union, on 1 January 1986, and where no legislation in force until the date of accession provided for such a restriction.

Judgment – C-527/24 Harry and Associés

Topics – EU VAT refund application containing errors – electronic submission – unreadable file

An Italian referral concerning an EU VAT refund application for VAT incurred in Italy. The refund was submitted to the French Tax Authority who forwarded the request to the Italian Tax Authority – Centro Operativo di Pescara (Pescara Operational Centre, ‘COP’). This administrative application, which was transmitted electronically contained errors that rendered the file unreadable. The claim was not processed, giving rise to silence on the part of the tax authority. Faced with the COP’s silence/inaction, Harry et Associés lodged an appeal before the Tax Court of First Instance, which, ruling on the merits, recognised that the applicant was indeed entitled to a VAT refund. The COP duly paid out the VAT refund, though it appealed seeking to get back the VAT repaid. The Tax Court is therefore asked to rule on an extremely complex issue involving the correct application of [EU] law. Specifically, the referral asks whether Article 167 of the VAT Directive and the general principles of VAT neutrality and proportionality of the limitation of the right to deduct VAT preclude: (a) national rules – which, in domestic law, by allowing a refund application vitiated by technical computer errors to be declared as devoid of effect, preclude access to the courts, and are such as to entail forfeiture of the right to be refunded in a substantive situation in which the VAT refund is due to the taxpayer; (b) a principle of law, such as that affirmed by the Supreme Court of Cassation, whereby ‘an application for refund of a VAT credit, which, owing to technical faults in the electronic transmission, is not visible to the tax authorities, is not suitable for creating a situation of appealable silent denial, as the tax authorities are not in a position to take action’, such as to preclude direct access to the courts in the case at hand, and therefore entail forfeiture of the right to a refund even in a substantial situation in which the refund is due?

This Guidance explains how to check if VAT is due on payments linked to private school fees and what VAT can be reclaimed. The example of parents contracting and paying therapists directly and the example of a school supplying education and therapy under separate fees have been updated to add clarity. Also, information on the VAT implications for fee-paying sixth forms and further education providers has been updated.

For further information please contact Carolyn Norfolk.

HMRC has published Guidelines for Compliance (GfC) 17 – Help with sharing group structure information. The Guidelines are intended to “help UK businesses share information about their group structure and transactions with HMRC. Sharing group structure and transactions aids in understanding of the UK tax consequences for corporation tax, VAT and custom duty.”

The Guidelines, which are not mandatory, do the following:

• Highlight when HMRC would like customers to share information about their group structure and transactions (see below)
• Detail the key information HMRC needs to understand a group or transaction (including ownership, residence and incorporation of entities)
• Clarify which shapes and symbols to use
• Set out how to deal with hybridity and complex group structures

Examples of when HMRC requests UK businesses to share group structure information include:

• Supporting a statutory clearance application
• Requesting an Advanced Pricing Agreement
• Making a Profit Diversion Compliance Facility disclosure
• Complying with a HMRC information request as part of a compliance check
• Showing business updates and significant business changes as part of the Large Business Risk Review process

The Guidelines include information on how to disclose permanent establishments, partnerships, hybrids and trusts. For more complex group structures, the Guidelines provide a table which can be completed to ensure HMRC has all of the relevant information on each entity, which can supplement information already provided for CbCR purposes.

HMRC notes that GfC17 is not mandatory and groups may continue to use the information they already have. However businesses are encouraged to check that the group structure information provides the key information set out in GfC17 and highlight and explain any differences between the best practice in the Guidelines and the information provided to HMRC. This could be in a letter, email or a table. Group structures should be dated and have a key.

Please also refer to:

• Help with sharing group structure information
• Appendix A – standard shapes and symbols
• Appendix B – practical examples

India

The Finance Minister has presented the Union Budget for 2026. Key indirect tax proposals include:

• The place-of-supply provisions under the Integrated Goods and Services Tax (GST) Act for intermediary services, currently based on the location of the supplier, would be changed such that the place of supply for such services will be determined based on the general rule of the location of the recipient of the service
• For ‘post-sale discounts’, the condition requiring linking the discount with the agreement and the original invoice would be changed. Such a discount would be subject to a credit note being issued and the corresponding input tax credit being reversed by the recipient
• A provisional GST refund would be available equivalent to 90% of the claimed amount for inverted tax refunds filed
• Upon formation of the National Appellate Authority for Advance Rulings (NAAR), the Government would be empowered to notify any existing authority (including a Tribunal) to hear appeals arising from conflicting advance rulings given by the Appellate Authorities of two or more States or Union Territories
• The validity of an advance ruling obtained under Customs law would be extended from three years to five years, unless there is a change in law or facts
• A Customs Integrated System would be rolled out in two years as a single, integrated and scalable platform for all customs processes

Saudi Arabia

The Zakat, Tax and Customs Authority (ZATCA) has introduced new controls for Voluntary Disclosure of customs violations which allow taxpayers to proactively disclose customs violations before the ZATCA detects them, enabling taxpayers to potentially obtain a full waiver of violations, provided specific conditions are met.

The Voluntary Disclosure framework specifically addresses violations categorized under Article 141 of the GCC Unified Customs Law, which includes inaccuracies in commodity classification, customs valuation, country of origin and data elements in import/export declarations. Certain violations, such as smuggling cases, are excluded from eligibility for the program.

To qualify for the waiver, businesses must submit Voluntary Disclosures on identifying errors before the ZATCA initiates any enforcement action, ensuring that all requests are complete and documented. The ZATCA will respond to applications within 30 days, providing clarity on acceptable self-correction procedures.

Businesses looking to potentially benefit from the new controls should proactively assess their customs declaration practices to identify and rectify any historical errors, thus reducing chances of financial liabilities and legal risks. They should also ensure that their internal processes are updated to facilitate effective participation in the program to align with international practices that promote transparency and adherence to customs regulations.