Indirect Tax

EU Abolishes Euro150 Customs Duty Exemption for Low-Value Imports

Excerpts from various sources

Effective 1 July 2026, the European Union has introduced significant customs reforms for low-value imports.

  • The EU has withdrawn the EUR 150 customs duty exemption for imports, meaning low-value consignments will no longer automatically qualify for duty-free entry.
  • Customs duties may now apply to imported goods irrespective of their value, depending on the applicable tariff classification.
  • The reform is limited to customs procedures and does not alter the existing VAT framework, including the Import One Stop Shop (IOSS) regime.
  • Under IOSS, VAT will continue to be collected at the point of sale, monthly IOSS filings will remain applicable, and import VAT relief will continue where IOSS is valid.
  • Businesses engaged in e-commerce and cross-border trade may face increased customs compliance, reporting, and declaration requirements.

Philippines: Additional guidance on VAT for digital services

Excerpts from various sources

The Philippine Bureau of Internal Revenue (BIR) has released Revenue Memorandum Circular No. 59-2026, effective on 2 June 2026, providing additional clarification on the operation of the country’s digital services VAT regime.

  • Non-resident providers supplying VAT-exempt digital services must still register with the BIR, submit VAT returns, and report them as exempt transactions.
  • For certain international cost-sharing arrangements, involving a foreign service provider and a Philippine subsidiary receiving the services, the foreign service provider is generally treated as the non-resident digital service provider (NRDSP) for VAT purposes.
  • Philippine businesses acquiring digital services from overseas providers must continue applying the reverse charge mechanism and account for the 12% VAT on B2B transactions, including services acquired through an online booking platform.
  • Companies that only facilitate real-time fund transfers in digital transactions are subject to VAT on service fees charged to customers.

France: Guidance clarifying e-reporting obligations for foreign companies

Excerpts from various sources

The French tax authorities have published new guidance outlining the e-reporting obligations that will apply to foreign companies without a permanent establishment in France. The guidance confirms that while foreign businesses are generally outside the scope of French e-invoicing, they may still be subject to separate e-reporting requirements.

The e-reporting obligation will apply from:

  • 1 September 2026 for large enterprises and intermediate-sized enterprises (ISEs);
  • 1 September 2027 for micro-enterprises, very small enterprises (VSEs), and SMEs;
  • 1 September 2027 for businesses acting as buyers in reverse-charge transactions and intra-Community acquisitions, regardless of company size.

Foreign businesses subject to e-reporting must select an authorized platform to transmit the required data to the French tax authorities.

UAE: New ministerial resolutions refine e-invoicing framework

Excerpts from various sources

The UAE Ministry of Finance has issued Ministerial Resolutions No. 56 and No. 66 of 2026, providing further clarity on the country's e-invoicing framework and implementation roadmap.

Ministerial Resolution No. 56 of 2026:

  • Updates the accreditation requirements for service providers operating within the UAE e-invoicing framework.
  • Service providers must be active Peppol-certified (i.e., use an Accredited Service Provider (ASP) authorized by the UAE Ministry of Finance) and have successfully completed OpenPeppol conformance testing.
  • Service providers must have a PSP product operational for at least two years.
  • Service providers must retain full compliance responsibility, even if outsourcing or using third‑party technology.

Ministerial Resolution No. 66 of 2026:

  • Large Businesses with annual revenue of AED 50 million or more must appoint an accredited service provider (ASP) by 30 October 2026.
  • These businesses must fully implement the e-invoicing system by 1 January 2027.

The resolutions provide additional clarity on both the implementation timeline for large businesses and the eligibility criteria for accredited service providers as the UAE continues the rollout of its national e-invoicing framework.

Tanzania: 2026-2027 budget introduces VAT and digital tax measures

Excerpts from various sources

The Tanzania Ministry of Finance has announced several indirect tax, customs, and digital compliance measures under its 2026–27 Budget, effective from 1 July 2026:

  • Enhanced digital tax administration includes mandatory e-payments, strengthened e-receipt systems, digital payment incentives, and digital proof requirements for selected transactions.
  • VAT exemptions for imported EV charging station equipment and LPG smart meters used by cooking gas suppliers.
  • VAT-related amendments, including refunds within 30 days with interest on delayed refunds, revisions to certain VAT exemptions, and new exemptions for specific sectors.
  • Custom duty on certain EVs reduced to 10% (From 25%).
  • Amendment to stamp duty rates and applicable thresholds.
  • Digital services tax raised to 3% (from 2%) for non-resident providers.

Chile: Simplified VAT regime extended to foreign online gambling platforms

Excerpts from various sources

The Chilean Internal Revenue Service issued Resolution No. 69, extending the simplified VAT regime for digital services providers to non-resident digital platform operators supplying online gambling, casino, and betting services to Chilean residents who are not registered for VAT. Key measures included in the resolution are as follows:

  • Non-resident operators providing online gambling, casino, and betting services must comply with the VAT registration, filing, and payment obligations applicable to other non-resident digital platform operators.
  • Taxpayers may be excluded if they to submit VAT returns or fail to declare and pay VAT on payments from Chilean users who are not registered for VAT.
  • VAT applies to the total consideration received for services.
  • Non-resident digital platform operators that have supplied services during the previous 36 months must, upon registration, submit VAT returns and pay any outstanding VAT liabilities relating to those services.

The resolution expands the scope of Chile’s simplified VAT regime for digital services and introduces specific compliance requirements for foreign operators in the online gambling sector.

Transfer Pricing

Singapore: Key Updates from the Ninth Edition of the IRAS Transfer Pricing Guidelines (Effective YA 2026)

Excerpts from various sources

The Inland Revenue Authority of Singapore (IRAS) has published the Ninth Edition of its e-Tax Guide on Transfer Pricing Guidelines on 4 June 2026, introducing a new FAQ that clarifies the transfer pricing treatment of share-based compensation (SBC) costs. The guidance is effective from Year of Assessment (YA) 2026.

The updated guidance confirms that share-based compensation costs are treated as employee remuneration and should be included in the cost base. This approach aligns with the OECD publication “The Taxation of Employee Stock Options”.

The clarification is particularly relevant for taxpayers applying the Transactional Net Margin Method (TNMM), including cost-plus remuneration models commonly adopted for intra-group service arrangements.

IRAS has also provided practical clarification on the treatment of three types of SBC costs:

  • Incurred SBC costs (where the cost is charged by a related party and recognized in the Singapore entity's accounts),
  • Uncharged SBC costs (where the cost relates to the Singapore entity but is not charged by the related party), and
  • Notional SBC costs (where the cost is not charged but recognized in the accounts for accounting purposes).

While all three categories must continue to be included in the service provider's cost base for determining the arm's-length mark-up, a welcome concession applies from YA 2026. Specifically, uncharged and notional SBC costs may be excluded from the service income charged to related parties, even though the mark-up must still be applied on the full cost base. In contrast, incurred SBC costs will continue to be included in both the cost base and the service income. The change addresses a longstanding practical concern for multinational groups, where uncharged or notional SBC costs formed part of the cost base and were marked up despite the absence of an actual recharge between related parties.

The table below summarizes the treatment of SBC costs:

Category YA 2025 and Before YA 2026 Onwards
Include in Cost Base? Include in Service Income? Include in Cost Base? Include in Service Income?
Incurred SBC Yes Yes Yes Yes
Uncharged SBC Yes Yes Yes No
Notional SBC Yes Yes Yes No

Our Comments

The Ninth Edition guidance provides clarity on the transfer pricing treatment of SBC costs in Singapore. The concession allowing uncharged and notional SBC costs to be excluded from service income, while remaining in the cost base for arm’s-length mark-up purposes, helps address practical challenges and reduces the historical mismatch in cost-plus arrangements. The update also complements Singapore’s Budget 2025 EEBR measures and contributes to a more consistent tax and transfer pricing framework. Taxpayers should review their transfer pricing policies and intercompany arrangements to align with the revised guidance from YA 2026 onwards.

OECD Proposes revision to Chapter VII of OECD Transfer Pricing Guidance on Intra-group Services

Excerpts from various sources

On 1 June 2026, the OECD released a public consultation document proposing revisions to Chapter 7 of the OECD Transfer Pricing Guidelines, which provides guidance on the transfer pricing treatment of intra-group services.

The proposed revisions also seek to align the guidance on intra-group services more closely with the broader transfer pricing framework set out in Chapters 1, 2, and 3 of the OECD Transfer Pricing Guidelines.

The proposed revisions aim to further enhance clarity and provide practical illustrations by adding new examples. The revisions are not intended to change the general principles underlying the transfer pricing analysis of intra-group services.

A key focus of the draft is the introduction of more detailed guidance on the accurate delineation of intra-group service arrangements and the application of the benefit test. While the core definition remains unchanged, the OECD provides additional clarification that a benefit may arise during or after the activity; need only be reasonably expected at the time the activity is performed, rather than guaranteed; should be assessed at the level of the recipient entity; and should be analyzed separately from the determination of arm's-length remuneration.

The OECD has also expanded its discussion on shareholder activities, stewardship activities, duplicative services, incidental benefits, and on-call services, providing additional guidance on when such activities should or should not attract a charge.

The draft also includes additional guidance on distinguishing service arrangements from transactions involving intangibles, including examples involving proprietary know-how and AI-enabled business models. The draft also clarifies that a cost-based method should not automatically be considered the preferred method for intra-group services and expands the discussion of CUP limitations, profit split applications, and pass-through costs.

Documentation expectations are also expanded, though this could prove disproportionate for smaller transactions. Twenty-one detailed examples are provided covering all of the above, to reduce controversy at the audit stage by providing both taxpayers and examiners with a common reference point.

Our Comments

While the OECD has clarified that the proposed revisions are not intended to change the fundamental transfer pricing principles applicable to intra-group services, the draft reflects a clear move towards greater emphasis on benefit substantiation, accurate delineation, and contemporaneous documentation. The proposed revisions are open for public consultation until 22 July 2026. MNE groups should stress-test management fee, shared service, and head-office charge structures against the enhanced guidance and consider providing feedback where the proposals may result in disproportionate compliance burdens.

Tax Street June 2026