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January 2025 Tax Headlines: Global VAT News

Here is our round-up of all the newest tax snippets from January 2025 – featuring news of rate changes, regulatory updates and reclassifications across the world.

Algeria

A temporary cut to VAT on tourism services from 19% to the reduced rate of 9% has been introduced, applying until 31 December 2027.

Bahamas

Government to reduce VAT on food by Half from 10% to 5% applying to fresh fruit/vegetables, frozen foods, baby food and certain snacks.

Bangladesh

Bangladeshi National Board of Revenue (NBR) has proposed moving a range of over 40 goods and services supplies from reduced rates to the standard 15% VAT rate. Including Restaurants, confectionery and clothing.

Czech Republic

Czech Republic has made significant changes to its VAT Act. One of the changes includes reducing the period for which VAT can be deducted from three to two years.

EU

A new, optional €100,000 EU VAT registration threshold for SME, enabling EU-resident businesses to sell in other EU states.

Guinea-Bissau

Introduced a Value Added Tax regime from January 2025, replacing the previous 19% Sales Tax.

Indonesia

An increase in VAT to 12% for luxury items is now effective. The regulation defines luxury items as goods not considered basic necessities high-income earners consume.

Italy

Italy introduced new VAT rules for non-EU businesses with Italian VAT representatives. These rules require increased guarantees and stricter fiscal representative obligations.

Latvia

Extension of the reduced VAT rate of 12% on qualifying fresh fruits, berries, and vegetables.

Montenegro

Officially gazetted changes to its reduced VAT rate, introducing a new 15% VAT rate alongside the existing 7% rate. With no change to the 21% standard rate.

Poland

 New VAT rules for streaming services are now effective as a result of the implementation of the EU Directive 2022/542.

Peru

Extended reduced VAT rate for tourism and hospitality – 8% for fiscal years 2025 and 2026, but will increase to 12% in 2027.

Slovenia

Beverages with added sugar/sweeteners and preparations for making such drinks are now excluded from the lower VAT rate.

Slovakia

Introduced a 3% VAT rise from 20% to 23% and a new 19% reduced rate.

USA – Louisiana

The state increased the sales tax rate from 4.45% to 5% and extended sales tax to digital services at the start of January.