Finland has proposed a 0.5% VAT rate reduction in the country’s mid-year budget discussions. The VAT rate would drop from 14% to 13.5%, and this change would go into effect on January 1, 2026. 

The bottom line: Finland recently made additional updates to the country’s VAT rate. In September 2024, the country increased its standard VAT rate to 25.5%. Finland’s finance minister implemented this tax increase to comply with the Euro currency membership requirement that government deficits cannot exceed 3%.

Sri Lanka has introduced official VAT rules for non-residents, effective October 1, 2025. VAT will be applied to services supplied by non-resident businesses through electronic platforms to persons in Sri Lanka. 

The bottom line: The country’s commissioner-general will release details on registration, payment, and compliance procedures soon, but income from the following services are likely to be liable to VAT collections: streaming music and video, apps, images, online gaming, automated e-learning, search engines, online advertising, SaaS or cloud-based software, and ride and home sharing apps.

Effective July 1, 2025, Utah will eliminate its 200-transaction economic nexus threshold for remote sellers. Currently, remote sellers must register for Utah sales and use tax if they generate over $100,000 in gross revenue from Utah or complete 200+ transactions in Utah.

The bottom line: Utah is following the Streamlined Sales and Use Tax Agreement's initiative to eliminate transaction thresholds. Transaction thresholds can be a burden for small sellers struggling with low-dollar transactions, and managing the 200-transaction threshold can be expensive for states to manage.

The Washington Department of Revenue has issued new guidelines on when companies can apply the state’s multiple points of use (MPU) sales tax exemption to sales of software maintenance agreements. A software maintenance agreement may qualify if (1) the software can be used both inside and outside of the state of Washington simultaneously, (2) if any included services directly support the software being offered, and (3) the agreement does not include any other taxable items.

The bottom line: Software companies can now exempt their bundled maintenance agreements from Washington sales tax when customers use the software across multiple states, creating substantial savings on multi-state transactions.

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The Maryland House of Delegates passed budget bill HB 352 implementing a new 3% sales tax on data and IT services. It will expand the definition of “taxable service” to include categories like software publishing, media licensing, and intellectual property. HB 352 will take effect on July 1, 2025.

The bottom line: This revised proposal, part of Maryland Governor Wes Moore's budget agreement with legislative leaders, follows lawmakers abandoning an earlier, more broadly opposed measure that would have imposed a 2.5% tax on many business-to-business services.

Manitoba's 2025 budget has proposed the expansion of retail sales tax to cover cloud computing services. Although this finance bill is still moving through the province’s parliamentary process, Manitoba Finance has already updated its information bulletin to help businesses prepare for the change. This change will go into effect starting January 1, 2026.

The bottom line: The tax will apply to all forms of cloud computing services (SaaS, PaaS, and IaaS) including video game subscriptions, cloud storage, and website hosting, with both resident and non-resident providers required to collect RST on services used in Manitoba.