Steve McCrindle
In the last issue of GGI's FYI Indirect Taxes News I commented on the tariff war and how, regardless of the rights or wrongs of the issue, it was great that indirect taxes are now featuring prominently on the global stage. This is also true with respect to the fundamental changes occurring or about to occur in value-added tax (VAT) and similar sales taxes in China, the USA, and the EU.
The changes in China appear to be very positive with more certainty for domestic and overseas firms doing business there. The scope of sales tax in some US states appears to be creeping firmly into the supply of services. The EU is introducing e-invoicing with what I consider onerous obligations on EU businesses, likely to impact overseas businesses in due course. Unfortunately, the UK is heading down the same route too. This implies micro-management and central control by the state. For those of you who have read George Orwell’s dystopian novel Nineteen Eight-Four, "Big Brother is watching you". This issue of the IDT newsletter features articles on all these changes, and very interesting reading they are too.
As some of you know, I will have been a full-time VAT practitioner for 40-years on the 03 December this year (you don’t look that old, I hear you say). That said, you are never too old or experienced to learn new things. Through this current issue of the IDT newsletter, I learned that VAT recovery in Mexico is only allowed on a ‘cash basis’ rather than an ‘accruals basis’, and previously I didn't believe any country would introduce VAT legislation that was not equitable, as Australia has. Australia has introduced a 4-year statutory GST cap, which the UK has had for VAT for many years. Nothing new there. However, in Australia, in certain circumstances, it does not apply to VAT declarable on sales but does on analogous purchases, i.e. there is no right to offset a VAT credit against VAT declarable on the sale. Completely inequitable. I don’t believe we have heard the last on this subject.
Of much interest to me is the import VAT regime being introduced in Poland. This regime will be analogous with that found in many European countries, including France, the Republic of Ireland, and the UK. It is supposed to be a simplification enabling better cashflow for users. Unfortunately, although it had the ability to design a simple regime, Poland has created a bureaucratic monster which is not a simplification at all. Its officialdom gone mad. The author of the article points this out in a far more subtle way than I do.
All the articles in this issue are of a very high standard and well worth your time reading them.
The GGI Indirect Taxes PG will run a session at the GGI World Conference in Zurich on the 01 November, immediately followed by a workshop on tariffs run by Adrienne Braumiller. If attending the conference, I hope to see you at these events.
We will also be running a webinar during November on EU e-invoicing implementation. GGI will circulate details in due course.
During 2026, we plan to run Indirect Taxes PG sessions at the GGI Expert Group Summit, GGI European Regional Conference, GGI North American Regional Conference, and the GGI World Conference.
My sincere thanks to all contributors, and I look forward to seeing some of you soon.
Hope you enjoy the newsletter!
Kind regards,
Steve McCrindleResponsible Editor & Global Chair of the GGI Indirect Taxes Practice Group
Disclaimer
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Steve McCrindle is a Partner at Prager Metis VAT Consulting Services LLP. He is also Global Chair of the GGI Indirect Taxes Practice Group. Contact Steve.
