As global tax authorities continue to modernize and adapt to digital economies, several jurisdictions have introduced important changes impacting VAT, sales tax, and indirect tax compliance. This month’s wrap-up highlights key indirect tax updates from around the world, including rate changes, expanded tax bases, and digital reporting initiatives.
Indirect Tax Updates: Saudi Arabia
Update:
The Zakat, Tax and Customs Authority (ZATCA) has confirmed the filing deadline for May 2025 VAT returns as June 30, 2025. All VAT-registered entities must submit their returns and payments by this date to avoid penalties. This aligns with the monthly VAT cycle for regular filers.
Indirect Tax Updates: Lithuania
Update:
The Lithuanian parliament has approved a tax reform that includes raising the standard VAT rate from 21% to 23%, effective January 1, 2026. This increase accompanies a corporate income tax hike and is part of the country’s broader efforts to strengthen public finances.
Indirect Tax Updates: Pakistan
Update:
Pakistan has extended the deadline for taxpayers to digitally link their invoicing systems with the Federal Board of Revenue (FBR). This integration requirement is part of the FBR’s push for greater digital compliance, real-time data sharing, and improved VAT enforcement.
Indirect Tax Updates: Finland
Update:
The Finnish Ministry of Finance is proposing a phased rollout of real-time VAT reporting, starting in 2026. The reforms would require businesses to submit VAT data electronically in near real-time, aligning Finland with broader EU digital reporting standards such as SAF-T and e-invoicing.
Indirect Tax Updates: United States
Minnesota
Update:
Minnesota has passed a set of tax code amendments that:
- Extend the sales tax exemption for data centers
- Introduce new fees applicable to digital services
- Revise sales tax definitions for certain digital goods and transactions
These changes support digital infrastructure growth and broaden the tax base in line with evolving technologies.
Washington
Update:
Washington has expanded its sales tax base to cover digital and professional services. This includes cloud-based solutions, software subscriptions, consulting, and other service-based offerings. The change reflects efforts to modernize tax collection in the digital economy.
Source: PwC Indirect Tax Digest – June 2025 (PDF)
Louisiana
Update:
Louisiana has revised its marketplace facilitator legislation to include accommodation intermediaries, such as online lodging platforms. These intermediaries are now responsible for collecting and remitting sales tax on short-term rentals made through their platforms.
Source: PwC Indirect Tax Digest – June 2025 (PDF)
Illinois
Update:
Illinois has:
- Updated its economic nexus thresholds for remote sellers
- Revised marketplace facilitator rules, particularly to cover digital services and gig economy platforms
These updates aim to strengthen enforcement and adapt the tax framework to modern commerce practices.
Source: PwC Indirect Tax Digest – June 2025 (PDF)
Stay Ahead of Change
Indirect tax landscapes are evolving rapidly- ensure your business remains compliant and competitive. Get in touch with our team for tailored guidance on how these updates may impact your operations, or to explore automation solutions for seamless VAT and sales tax compliance.
