Country and European News December 2025

1 December 2025

Cypriot government extends VAT rate cut on essential goods until December 2026

The Cypriot government has again extended the temporary reduction on the 5% and 19% VAT rates applied to certain essential goods until 31 December 2026.

The VAT rates have been reduced from:

• 5% to 0% for milk, bread, eggs, and baby food.
• 19% to 5% for detergents, fabric softeners, toilet paper, baby and adult diapers, and cleaning supplies.

Poland releases free e-invoicing software (KSeF)

In November 2025, the Polish Ministry of Finance made free KSeF e-invoicing software available for testing.

The Polish Ministry of Finance previously confirmed that the mandatory KSeF e-invoicing regime will be introduced for:

• Large taxpayers with a turnover of over PLN 200 million (approx. £39m) per annum in the previous year, from 1 February 2026.
• All other taxpayers, from 1 April 2026.

When implemented, KSeF will require resident and non-resident companies with a fixed establishment in Poland that sell to VAT-registered businesses in the country to declare sales to the Polish tax authorities via a new e-invoicing platform. This will replace the current process of sending invoices directly to customers.

Liberia proposes VAT on foreign digital services from 1 January 2027

Liberia has published a draft version of its National Budget for 2026, which proposes the introduction of VAT at 13% on digital services provided by foreign suppliers to Liberian consumers.

The new tax will be introduced on 1 January 2027 and is part of the country’s plans to gradually implement a VAT regime during 2026. The new VAT system will replace the current GST system in place.

United Arab Emirates to introduce E-Invoicing

The UAE Ministry of Finance recently published its e-invoicing framework for the launch of mandatory e-invoicing, along with its first list of pre-approved Accredited Service Providers.

This is part of a wider initiative that the Ministry of Finance describes as an “e-billing system,” which will allow companies to issue and receive all their invoices electronically and use the data collected to populate and file tax returns automatically.

The UAE will introduce e-invoicing under a phased approach:

• July 2026 – Voluntary pilot phase
• January 2027 – Mandatory for taxpayers with turnover above AED 50 million (Approx. £11M)
• July 2027 – Mandatory for taxpayers with turnover below AED 50 million