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Sales and use tax updates

1. Alaska

City and Borough of Juneau: Sales Tax Cap Increase Effective October 1, 2026

Effective October 1, 2026, the City and Borough of Juneau increases the sales tax cap on a single item or single service to $50,000 under Ordinance 2026-27am. A sub-cap of $15,000 continues to apply to motor vehicle sales with a selling price of $50,000 or less. In addition, Ordinance 2026-26 expands the geographic area for cruise ship on-board sales tax collection to include Stephens Passage, and Ordinance 2026-22 shifts marketplace facilitator registration, reporting, and remittance to the Alaska Remote Seller Sales Tax Commission (ARSSTC). The municipal sales tax rate remains unchanged. Click here for more information

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2. Arizona

Town of San Tan Valley: New Retail Sales Food for Home Consumption Tax Effective January 1, 2027

Effective January 1, 2027, the Town of San Tan Valley, Arizona, will impose a new 2.25% transaction privilege tax on retail sales of food for home consumption (groceries). Under this classification, the 2.25% local rate applies specifically to eligible grocery items sold for consumption off-premises, while prepared food and dining remain subject to the town's separate 2.25% classification for restaurants and bars.

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3. British Columbia, Canada

Update 1: PST Expansion to Professional Services Paused (Originally Effective October 1, 2026)

The Province of British Columbia has paused the planned expansion of its 7% Provincial Sales Tax (PST) to professional services originally scheduled to take effect October 1, 2026. Initially announced under Budget 2026 and outlined in Notice 2026-001, the expansion would have applied PST to accounting (including bookkeeping and assurance), architectural, engineering and geoscience, security, and non-residential real estate services. Following the Province's September 18, 2026 announcement citing economic uncertainty, none of the five service categories will become taxable on October 1, 2026, and no new effective date has been established. Province’s announcement can be referred here.

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Update 2: British Columbia: PST Exemptions Eliminated on Clothing-Related Goods, Services, and Telecommunications (Effective October 1, 2026)

Effective October 1, 2026, British Columbia eliminates Provincial Sales Tax (PST) exemptions across selected goods, repair and alteration services, and basic telecommunication services. The 7% PST now applies to clothing patterns, yarn, natural fibres, synthetic thread, and fabric commonly used in making or repairing clothing, as well as related services to clothing and footwear such as alterations, tailoring, and shoe repair. Basic laundry services remain exempt.

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4. California

Update 1: Los Angeles County: District Tax Rate Increase Effective October 1, 2026

Effective October 1, 2026, a new 0.500% countywide district tax increases the combined sales and use tax rate in Los Angeles County from 9.750% to 10.250%. The increase applies in all unincorporated areas as well as incorporated cities throughout the county, raising total combined rates in municipalities with existing local district taxes—including Burbank, Glendale, Long Beach, Pasadena, and West Hollywood (to 11.000%) and Culver City and Santa Monica (to 11.250%).

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Update 2: City of Perris: New District Tax Effective October 1, 2026

Effective October 1, 2026, the City of Perris in Riverside County imposes a new 1.000% district tax, increasing the total combined sales and use tax rate from 7.750% to 8.750%.

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Update 3: City of Red Bluff: District Tax Rate Increase Effective October 1, 2026

Effective October 1, 2026, the City of Red Bluff in Tehama County increases its district tax rate by 1.000%, raising the total combined sales and use tax rate from 7.500% to 8.500%.

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5. Colorado

Colorado: Sales and Use Tax Exemption for Downloadable Software Narrowed Effective January 1, 2027

Effective January 1, 2027, House Bill 26-1223 narrows Colorado's sales and use tax exemption for downloadable software. Under the legislation, all types of downloadable software become subject to state sales and use tax, except for custom software developed for use by a particular user and software governed by a negotiable license agreement. Under prior law, only prepackaged software delivered via a tangible physical medium was subject to state sales and use tax, while downloadable and remotely accessed software remained exempt. The change also applies to state-collected local taxing jurisdictions and special districts that conform to the state sales tax base, including the Regional Transportation District (RTD) and the Scientific and Cultural Facilities District (SCFD).

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6. District of Columbia

District of Columbia: General Sales and Use Tax Rate Increase Postponed to October 1, 2027

The District of Columbia Office of Tax and Revenue has announced that the scheduled general sales and use tax rate increase is postponed to October 1, 2027. The general tax rate on gross receipts from sales of tangible personal property and taxable services remains at 6.0% through September 30, 2027, before increasing to 7.0% effective October 1, 2027.

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7. Oregon

Oregon: Transient Lodging Tax Rate Increase Effective January 1, 2027

Effective for stays ending on or after January 1, 2027, Oregon's state Transient Lodging Tax rate increases from 1.5% to 2.75% of the amount charged for occupancy. Enacted by the 2026 Oregon Legislature, the additional 1.25% must be identified on lodging invoices or receipts as a nature conservation fee. For any stay beginning in 2026 and ending on or after January 1, 2027, lodging providers must apply the 2.75% rate to the total retail price of the entire stay, including existing pre-paid bookings.

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VAT updates

1. Austria

Austria to Introduce €2 Parcel Tax on B2C Distance Sales from October 2026

Starting October 1, 2026, Austria will implement a new €2 parcel tax (Paketsteuer) targeting B2C distance sales delivered within the country. This national tax applies to distance sellers and online marketplaces whose relevant Austrian sales exceeded €100 million (excluding VAT) in the preceding financial year, covering both domestic and cross-border transactions (including intra-EU and third-country imports).

Rather than affecting the VAT rate charged to customers, this measure introduces a separate, quarterly self-assessed compliance process where the tax liability is triggered upon payment acceptance rather than dispatch or delivery. Affected businesses can elect to calculate the levy as €2 per delivered parcel or €2 per qualifying order, with explicit exemptions for B2B transactions, click-and-collect orders, and standard food deliveries.

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2. Germany

Germany’s Transition to an Elective VAT Grouping Regime

Germany is set to reform its VAT grouping rules, transitioning from an automatic system to an elective regime. Under the new draft law, corporate groups will no longer be treated as a single taxable entity by default; instead, they must actively opt-in to form a VAT group.

This shift is particularly crucial for businesses like financial services and insurance groups that make largely exempt supplies, as opting in prevents intra-group charges from becoming taxable, thereby mitigating irrecoverable input VAT costs. The reform also formally recognizes partnerships as eligible controlled entities within a VAT group, aligning with recent case law, and introduces new regulations concerning corrections, unwinding, interest, and joint liability for incorrectly assumed VAT groups.

Furthermore, the legislative package raises the full interest assessment rate to 3.6% annually starting January 1, 2027, increasing financial risks for erroneous VAT assumptions. The timeline for this transition has been extended, with the first election window opening on July 1, 2029, for changes taking effect on January 1, 2030.

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3. Serbia

Serbia approves updated VAT rulebook introducing Preliminary Tax Return framework
Starting January 1, 2027, Serbia is shifting to a more automated VAT reporting model under an updated VAT Rulebook (Official Gazette of RS, No. 71/2026). Instead of filing returns entirely from scratch, a new Preliminary VAT Return (PPP PDV) will automatically generate inside the electronic invoicing (SEF) portal using sales and invoice data.

This update replaces the legacy PO-PDV form and introduces a revised main VAT return (Form PP PDV), supported by four specialized annexes (Priloge 1-4) to capture additional details such as equipment investments, specific procurements, and tax adjustments.

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4. Japan

Japan cabinet approves temporary Consumption Tax cut on food to 1%

Japan’s Cabinet has approved a tax reform outline to temporarily cut the consumption tax on food and beverages from 8% to 1% for a two-year period starting April 2027. Aimed at relieving household financial burdens driven by rising food prices, the reduced 1% rate will apply to retail food and grocery items, while food consumed in restaurants will remain taxed at the standard 10% rate.

After the two-year temporary cut ends in 2029, the government plans to transition to a targeted benefit and tax credit system supporting low- and middle-income households. The copy of the official cabinet document can be found here.

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5. United Kingdom

UK introduces temporary 0% VAT rate for domestic electricity in Great Britain from October 1, 2026

The UK Government has introduced a temporary 0% VAT rate on qualifying supplies of domestic electricity across England, Wales, and Scotland, running from October 1, 2026, to March 31, 2027. Enacted under The Value Added Tax (Supplies of Domestic Electricity) Order 2026 (S.I. 2026/987), this measure temporarily cuts the VAT rate from 5% to 0% for domestic households and qualifying charitable or residential uses in Great Britain.

The temporary zero-rating does not apply to Northern Ireland, where qualifying domestic electricity supplies will remain subject to the 5% reduced VAT rate. Energy suppliers and utility businesses operating in Great Britain must adjust their billing and tax determination systems to reflect the 0% rate for qualifying billing cycles within the temporary timeframe.

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6. United Arab Emirates

UAE amends VAT Executive Regulation, effective October 1, 2026

The UAE Government has issued Cabinet Decision No. 149 of 2026, updating several provisions of the Executive Regulation of Federal Decree Law No. 8 of 2017 on Value Added Tax. The updates refine the zero rating criteria for specified medical products and related goods provided during healthcare services, while revising the Capital Assets Scheme to target business assets costing AED 5 million or more.

Additional amendments update the definition of persons considered outside the State, revise input tax recovery conditions for employee expenses, introduce a value based input tax apportionment method, block input tax recovery on cash payments exceeding prescribed thresholds, and establish rules for single composite supplies.

Most provisions take effect starting October 1, 2026, while the revised input tax apportionment rules apply from the first tax year commencing after October 1, 2027. Businesses operating in the UAE should evaluate their accounting, procurement, and billing systems to align with these regulatory changes.

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E-invoicing and live reporting updates

1. Poland

Poland Proposes Extension of KSeF Penalty Relief Through December 2027

The Polish Ministry of Finance has proposed extending the suspension of penalties for errors related to the National e-Invoicing System (KSeF) until December 31, 2027. The measure is intended to provide businesses with additional time to adapt to mandatory e-invoicing requirements and complete implementation activities ahead of full operational compliance.

While the penalty deferral would be extended, mandatory KSeF obligations would remain in force as scheduled, with tax authorities continuing to monitor compliance throughout the transition period.

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2. Australia

Australia Strengthens Peppol Accreditation Framework with Enhanced Security Requirements

The Australian Taxation Office (ATO) has updated its Peppol Service Provider Accreditation Process to align with new OpenPeppol security requirements, mandating that, all accredited service providers must obtain and maintain ISO/IEC 27001 certification, or an approved equivalent.

Existing providers must comply the new requirements by October 1, 2027, while new providers will be required to hold the certification before obtaining their first Peppol PKI production certificate from January 1, 2027. The accreditation process also now requires submission of an Information Security Questionnaire.

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3. Slovakia

Slovakia Publishes Implementation Guidance for VAT and Non-Payers

The Slovak Financial Administration has confirmed that, from January 1, 2027, mandatory electronic invoicing will be introduced for domestic B2B and B2G transactions. This reform will change how invoices are prepared, transmitted, and received, while B2C transactions will not be subject to the mandate, but will continue to receive invoices through existing processes.

The guidance outlines key readiness requirements for VAT and Non-VAT payers, including VAT status verification, selection of an appropriate e-invoicing solution, system preparation, and participation in voluntary testing activities.

The official document can be found here.

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4. Malaysia

Malaysia Increases E-Invoice Exemption Threshold for MSMEs

The Inland Revenue Board of Malaysia (HASiL) has revised the e-Invoice implementation exemption threshold, increasing it from RM1 million to RM3 million in annual revenue or sales. Effective September 1, 2026, Micro, Small and Medium Enterprises (MSMEs) with annual revenue below RM3 million are exempt from mandatory e-Invoicing requirements.

The measure is intended to alleviate compliance burdens and reduce implementation costs for smaller businesses, while providing greater operational flexibility and continuing to encourage voluntary adoption of e-Invoicing.

The official document can be found here.

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5. France

France Launches E-Invoicing Mandate with Transitional Support Measures

The French Ministry of Finance has announced the commencement of the nationwide e-invoicing reform on September 1, 2026. Large and medium-sized enterprises are now required to issue invoices in the prescribed electronic format, while all businesses must be capable of receiving electronic invoices.

To support implementation, the government has adopted a transitional approach for 2026, prioritizing taxpayer assistance over enforcement through guidance, dedicated support channels, and implementation monitoring. The Ministry has also reaffirmed cybersecurity requirements for approved platforms ahead of the next phase of the reform in September 2027.

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6. Croatia

Croatia Modernizes Fiscalization Framework Through Ordinance Amendments

The Croatian Ministry of Finance has published amendments to the Ordinance on Fiscalization of Receipts in Final Consumption in Official Gazette NN 97/2026, effective January 1, 2027, advancing Croatia’s fiscalization and e-invoicing modernization framework.

The amendments establish a modernized digital certificate framework for fiscalization, introducing updated requirements for taxpayer registration, electronic signing, and the cryptographic security code printed on receipts. The revised rules harmonize certificate terminology and allow digital certificates issued before entry into force to remain valid until their expiry, supporting a phased transition.

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7. Greece

Greece Expands Digital Goods Movement Reporting with myDATA 2.0.2 Update

The Independent Authority for Public Revenue (AADE) has released myDATA version 2.0.2, introducing enhanced digital capabilities to support the management, reporting, and monitoring of goods movements.

The update expands integration with ERP and service provider systems while delivering functional enhancements across transportation and delivery processes, document lifecycle management, quantitative receipts, and related digital logistics workflows, further strengthening Greece's digital tax compliance framework.

The official document can be found here.

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Cross border tariff updates

1. Switzerland

Switzerland's Federal Office for Customs and Border Security has published a customs tariff update effective 1 September 2026. The update revises agricultural market regulation customs duty rates for products covered under Annex 2 of the Agricultural Imports Ordinance (RS 916.01). Affected goods include pulses and leguminous vegetables, cereals and feed grains, as well as cereal flours, groats, and worked grains. Additionally, modified rates apply to sugar molasses, cereal milling residues, and prepared animal feed formulations, alongside adjusted duty rates for edible vegetables, roots, and tubers under the Swiss agricultural market regime. The official tariff decision can be found here.

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2. Liechtenstein

Liechtenstein has implemented a customs tariff update effective 1 September 2026. The update revises agricultural market regulation customs duty rates for products covered under Annex 2 of the Agricultural Imports Ordinance (RS 916.01). Affected goods include pulses and leguminous vegetables, cereals and feed grains, as well as cereal flours, groats, and worked grains. Additionally, modified rates apply to sugar molasses, cereal milling residues, and prepared animal feed formulations, alongside adjusted duty rates for edible vegetables, roots, and tubers under the Swiss agricultural market regime. The official tariff decision can be found here.

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3. Australia

Australia's Border Force has published Customs Notice No. 2026/32 on customs duty rates for tobacco and tobacco products, effective 1 September 2026. The update applies to Chapter 24 (Tobacco and Manufactured Tobacco Substitutes), revising excise-equivalent customs duty rates for unmanufactured tobacco, cigars, cigarettes, and other tobacco products, following an AWOTE-based indexation factor of 1.016 derived from the June 2026 AWOTE against the December 2025 AWOTE. The revised rates flow through to Schedules 3 and 4A–16 of the Customs Tariff Act, covering originating-goods treatment under Australia's free trade agreements. Products taxed on a "per kilogram" basis have their rate derived by dividing the indexed "per stick" rate by an applicable weight conversion factor.

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4. Jamaica

Jamaica's Customs Agency has updated its Integrated National Tariff, effective 10 August 2026, with product-level MFN rate revisions across multiple agricultural, consumer, and industrial categories. The main MFN updates impact product lines covering fish and crustaceans, preparations of meat and fish, preparations of vegetables, fruit and nuts, miscellaneous edible preparations, beverages, spirits and vinegar, and tobacco and manufactured tobacco substitutes. Revisions to MFN duty rates also extend to salt, sulphur, earths and stone, mineral fuels and oils, pharmaceutical products, essential oils and cosmetic preparations, other made-up textile articles, electrical machinery and equipment, and motor vehicles and parts. Overall, the update refreshes MFN customs duty treatment across these selected sectors while keeping the broader tariff framework intact.

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5. European Union

The European Union has updated its TARIC customs tariff schedule, effective 1 September 2026, introducing revisions to tariff codes, MFN rates, and preferential (FTA) duty rates across selected agricultural and forestry goods. The primary updates impact product lines covering meat and edible meat offal, live trees and other plants (including cut flowers and ornamental foliage), edible vegetables and certain roots and tubers, and edible fruit and nuts. In addition, the latest schedule reflects tariff code restructuring and duty adjustments for wood and articles of wood, as well as wood charcoal. Overall, the update revises tariff codes, MFN treatment, and free trade agreement rate concessions across these specific product categories while keeping the broader EU customs tariff framework intact.

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6. United States

Modifications to the Section 338 Canada duties pursuant to the Presidential proclamations on modifying the scope of products of Canada subject to the additional duties imposed to offset Canadian discrimination against the commerce of the United States with respect to alcoholic beverages and motor vehicles issued on September 8, 2026 which would be effective from

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7. Canada

The Government of Canada, through the Canada Border Services Agency (CBSA) and the Department of Finance, has updated its customs tariff schedule under the United States Surtax Order (2026), effective 8 September 2026, introducing retaliatory counter-tariffs and surtax duty adjustments across selected goods originating from the United States . The primary updates impact key commodity and industrial product lines, applying a 50% Surtax on steel and aluminum as well as motor vehicles. In addition, the latest schedule introduces a 15% surtax covering agricultural machinery and farm implements, pulp, paper, and paperboard packaging, electronics and electrical components, and plastics and industrial chemicals. Overall, the update enforces targeted retaliatory surtax rates (of either 15%, 25% or 50% of the value for duty) as applicable, in accordance with the United States Surtax Order (2026).

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8. Pakistan

Effective 25 August 2026, Pakistan's Federal Board of Revenue (FBR) implemented updates to the Pakistan Customs Tariff for the fiscal year 2026–27. The update encompasses HS code restructuring (additions and deletions) and MFN customs duty rate revisions spanning primary agricultural commodities, chemical products, textiles, metals, machinery, and automotive goods.

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9. Nepal

Nepal’s Department of Customs under the Ministry of Finance has published the Customs Tariff update for Fiscal Year 2026/2027. The update introduces new product subdivisions for fermented beverages, travel luggage and suitcases, pine wood chips, and specialized chemical and food preparations. In addition, import customs duty rates have been reduced across basic food and dairy produce, sugar confectionery, chocolates, pasta, bakery items, non-alcoholic beverages, footwear, ceramic tiles, paints, and a broad range of inorganic and organic industrial chemical raw materials. Full customs duty exemptions are now granted to induction and infrared cooking stoves, large electric passenger buses, and specialized bulk liquid transport tankers. Conversely, higher duty rates apply to gold and silver bullion, precious jewellery, manufactured cigarettes, cigars, processed tobacco, and certain agricultural machinery and tools, alongside a streamlined flat duty regime for electric passenger cars.

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