In this update, we provide a summary of important VAT and Customs Tax developments from May 2026 with implications for global business operations.
The CJEU has ruled that intra-group transfer pricing adjustments designed to ensure a target operating margin do not constitute consideration for a separate taxable supply of services for VAT purposes, absent a direct link between the adjustments and an identifiable service.
Revenue has updated its guidance to confirm that factoring and invoice discounting are a single taxable debt collection service, removing any basis to treat funding elements within those arrangements as VAT-exempt financial services.
The Italian Tax Authority confirmed that non-EU individuals relocating their residence to Italy – including those qualifying under the so-called neo-resident regime – may benefit from VAT exemption on the importation of personal goods, including pleasure yachts.
Notably, the Italian Authority adopts a substance-over-form approach in interpreting the "possession" and "place of use" requirements set out by Directive 2009/132/CE.
The Hertogenbosch Court of Appeal recently held that a taxpayer is not eligible for late-payment interest for a VAT repayment claim resulting from an error made by the taxpayer.
A taxpayer‑favourable ruling by Romania’s High Court overturns the long‑standing practice of assimilating carried forward VAT refund rights to time‑barred restitution claims.
Spanish Tax Authority clarifies foreign VAT refund eligibility of US businesses.
California’s Governor proposes extending the state’s sales and use tax to all digital prewritten software—including SaaS—effective January 1, 2027, eliminating delivery-method distinctions that have long shielded cloud-based products from taxation.
UK FTT decides that if an online marketplace applies the VAT rules incorrectly, sellers may still be responsible for VAT themselves resulting in possible double taxation if not carefully reviewed.