End-of-year sales tax and VAT report: 2025

The second half of 2025 brought notable shifts in US sales tax and global VAT. States continued expanding taxation of digital services and cloud products, refining nexus standards, and introducing new sourcing rules, while countries across Europe and Asia advanced VAT and e-invoicing initiatives. For businesses selling across borders, these updates add new compliance pressure and operational complexity.

This year’s review covers Chicago’s updated digital tax rates and proposed social-platform fee, new digital advertising taxes in Washington and Maryland, the shift to revenue-only nexus thresholds in key states, and Manitoba’s decision to tax cloud services starting in 2026. It also looks ahead to what’s coming next—including EU import VAT changes, US cash-rounding updates, expanded MPU guidance for SaaS, and the UK’s path toward mandatory e-invoicing.

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