South Africa canceled its planned VAT increase following political opposition. The proposed 1% increase over two years, aimed at raising government revenue, faced resistance as the country struggles with slow economic growth and rising living costs. 

The bottom line: South Africa’s VAT rate will remain at 15%. The country’s finance ministry stated that no immediate alternative revenue sources will replace the canceled VAT increase.

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-resident electronic service providers, 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.

The Illinois Department of Revenue published a general information letter (ST25-0022-GIL) addressing whether tariffs are deductible when calculating how much sales tax they owe to the state. The state clarified that, for most retailers, tariffs are not deductible in calculating their owed sales tax and that tariffs paid by retailers are included in taxable gross receipts. 

The bottom line: If your business imports goods and pays the tariffs (even if separately itemized on customer invoices), those tariff costs must be included in your taxable receipts; but if your customer handles the importation and pays tariffs directly to the U.S. Customs, only the amount you charge the customer is taxable.

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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