Ecovis in South Africa

VAT refund China: A paradigm shift for foreign tourists

Foreign tourists in China can receive an instant VAT refund on purchased goods at certain retail stores. With this nationwide real-time VAT refund system, the government aims to increase the attractiveness of the country for international visitors. The Ecovis experts explain the process.

Under the new rules issued by the State Taxation Administration (STA), foreign tourists who shop at certified tax-free retailers can receive their VAT refund on the spot, following a credit card pre-authorisation. Customs will later verify the purchase and traveller’s identity upon departure, at which point the refund becomes final. To qualify, the buyer must reside outside mainland China and stay no longer than 183 days.

The advantages of the VAT refund system

This new system offers clear advantages: no more lengthy refund queues at airports, no paperwork in many stores, and immediate liquidity – refunds are credited to the shopper’s account within minutes. Currently, in Zhejiang Province alone, over 120 stores already support this process. Feedback from travellers has been overwhelmingly positive, citing speed and convenience as key benefits.

Bring your passport with you when you go shopping and ask the retailer about the exact procedure.

Pingwen Hu, Senior Partner and Certified Public Accountant, ECOVIS Ruide Certified Public Accountants Co., Ltd, Shanghai, China

The reform is part of China’s broader strategy to stimulate inbound tourism and consumer spending. Compared globally, this policy places China alongside leading countries such as South Korea and Japan, which have also introduced point-of-sale VAT refunds.

For further information please contact:

Pingwen Hu, Senior Partner and Certified Public Accountant, ECOVIS Ruide Certified Public Accountants Co., Ltd, Shanghai, China
Email: pingwen.hu@ecovis.cn

Transfer pricing: A comprehensive compliance guide for the Czech Republic, Hungary, Poland and Slovakia

Transfer pricing has become a critical issue for multinational companies operating in the Visegrád Group (V4), which includes the Czech Republic, Hungary, Poland, and Slovakia. Ecovis experts from these countries have therefore developed a comprehensive guide to help companies correctly implement the requirements.

The alliance shares a rich historical and economic background, which has created close business ties and made the region an attractive destination for foreign investment. Nevertheless, the V4 maintain distinct legislative and regulatory environments, particularly in the field of transfer pricing, creating both opportunities and significant compliance challenges for companies.

OECD guidelines on transfer pricing in national legislation

The V4 countries, as members of the OECD, have incorporated the OECD transfer pricing guidelines and the BEPS (Base Erosion and Profit Shifting) framework into their national legislation. However, each member state interprets and applies the soft law differently, leading to a diverse and sometimes fragmented regulatory landscape.

Over the past few years, transfer pricing has attracted heightened attention from tax authorities across the region. The post-COVID era has seen a wave of legislative updates and stricter enforcement, with authorities leveraging transfer pricing audits as a key tool to address potential non-compliance. As a result, tax advisors must navigate not only national documentation requirements – such as Local Files and Country-by-Country (CbC) notifications – but also the small details of each jurisdiction’s approach to compliance, penalties, and audit procedures.

The complexity emerges further in documentation thresholds, language requirements, penalty regimes, and the use of databases for benchmarking. For example, the criteria for related-party definitions, the scope of documentation, and the treatment of low-value transactions vary significantly. Moreover, the increasing digitalisation of tax administration and the introduction of new reporting forms have placed additional pressure on taxpayers to maintain robust and up-to-date transfer pricing documentation.

We provide you with support in implementing the complex transfer pricing process in the Czech Republic, Hungary, Poland and Slovakia.

Branislav Laurinc, Tax advisor, ECOVIS LA Partners Tax, Bratislava, Slovak Republic

What companies should do now

Given the dynamic regulatory environment and the growing scrutiny from tax authorities, companies operating in the V4 must be proactive in managing their transfer pricing risks. Accurate and country-specific documentation with a thorough understanding of local regulations is essential to avoid costly penalties and ensure compliance.

As the region continues to evolve its approach to transfer pricing, staying informed of legislative changes and audit trends will be crucial for businesses seeking to navigate the complexities of the V4 market.

For further information please contact:

Dávid Szabó, Tax advisor, ECOVIS Hungary Tax, Budapest, Hungary
Email: david.szabo@ecovis.hu

Simona Fialova, Partner, ECOVIS FACTA a.s., Prague, Czech Republic
Email: simona.fialova@ecovis.cz

Branislav Laurinc, Tax advisor, ECOVIS LA Partners Tax, Bratislava, Slovak Republic
Email: branislav.laurinc@ecovis.sk

Agata Wleklinska, Tax advisor, ECOVIS LEGAL POLAND, Warsaw, Poland
Email: agata.wleklinska@ecovis.pl

Tax policy Germany: New coalition agreement brings tax policy shifts

The new German federal government has adopted tax changes for companies in its coalition agreement. These include corporate taxation, tax relief for work and income, as well as for electromobility and energy efficiency. The Ecovis tax advisors explain the details. 

The new coalition of the Christian Democratic Union (CDU), Christian Social Union (CSU), and Social Democratic Party (SPD) has also set numerous goals in its coalition agreement to strengthen the economy and Germany as a business location.

Tax incentives for investment

The coalition agreement introduces several changes to corporate taxation, notably a 30% accelerated depreciation for certain business investments, limited to the years 2025-2027.This measure aims to encourage investments in new business assets, particularly in the technology and infrastructure sectors. In addition, tax breaks for research and development spending are to be expanded. The goal is to boost companies’ innovation power – this could be achieved in the future through expanded business expense deductions or targeted R&D bonuses.

Corporate taxation

The corporate tax rate will be gradually reduced by 1% each year starting in 2028, from the current rate of 15%. The solidarity surcharge will remain, and the minimum trade tax rate will increase from 200% to 280%, raising the tax burden on businesses in some regions. The introduction of an investment allowance for small and medium-sized enterprises (up to EUR 50,000 annually for future investments) is intended to make Germany an attractive location for business again. As things stand at present, there are no plans to increase income tax rates.

Tax relief in Germany would be a positive signal for companies and the location.

Marion Dechant, Tax Advisor, ECOVIS Wirtschaftstreuhand GmbH Auditors, Munich, Germany

Energy taxes

In order to reduce energy prices, the electricity tax is to be reduced to the minimum level specified by European law. Also, tax exemptions for agricultural diesel engines are to be maintained, protecting farmers from additional costs.

Tax relief for work and income

A new provision could allow for tax-free overtime in certain sectors, which may reduce the overall tax burden for employees working overtime. Additionally, retirees may benefit from a EUR 2,000 tax-free monthly allowance if they continue working after reaching the official retirement age. This is intended to support older citizens, particularly those who wish to remain active in the workforce after retirement. The commuter allowance is expected to rise to EUR 0.38 per kilometre starting in 2026 (currently EUR 0.30). This change could make commuting more financially viable for individuals living in more remote areas.

Electromobility

Electric vehicles used as company cars are to receive tax incentives by increasing the gross price limit to EUR 100,000. In addition, special depreciation allowances are to be introduced for electric vehicles to promote the transformation of the transport sector. Furthermore, the motor vehicle tax exemption for electric vehicles will be extended until 2035.

For further information please contact:

Marion Dechant, Tax Advisor, ECOVIS Wirtschaftstreuhand GmbH Auditors, Munich, Germany
Email: marion.dechant@ecovis.com

E-invoicing Poland: What companies need to know about the introduction

Polish lawmakers are working on introducing a national e-invoice system (KSeF). Currently, taxpayers can use the platform for issuing and receiving electronic invoices voluntarily; starting in 2026, use of the system will be mandatory. The Ecovis experts recommend that companies prepare now.

The background to the national e-invoice system

KSeF is an IT system for sending, receiving and storing structured invoices containing the mandatory fields specified by the regulations in xml file format (so-called e-invoices). Once the invoice data is entered into the system, the document is assigned a unique identification number and the system verifies that the data complies with the structured invoice template. The invoice itself will be deemed to have been issued on the day it is uploaded to the system and to have been received on the day it is assigned a KSeF number.

The basic functions of the system include:

• Issuing of invoices by sellers
• Receipt of invoices by purchasers
• Real-time control of transactions by tax administration authorities
• The granting and withdrawal of rights and authorisation in the system

E-invoices can also be issued using free tools to be made available by the Ministry of Finance or commercial software.

Who must issue electronic invoices using the KSeF system

The KSeF system will cover all active VAT taxpayers, entrepreneurs exempt from VAT and taxpayers identified in Poland for the OSS procedure with a Polish TIN.

The obligation to issue e-invoices will not apply, among others, to:

• Taxpayers who have neither the seat of their economic activity nor a permanent place of business activity in the territory of Poland
• Taxpayers who do not have the seat of their economic activity in the territory of Poland but have a permanent place of business activity in Poland if this is not connected with the invoiced supply of goods or the provision of services.

We can assist you during implementation a system to issue e-invoices in your entity.

Hubert Kaczyński, Tax Advisor, ECOVIS Poland, Warsaw, Poland

When does the KSeF obligation apply

From 2026 onwards, the mandatory use for taxpayers will be staggered. Thus, the KSeF will be mandatory:

• From 1 February 2026 for large entities (who exceeded PLN 200 million in turnover in the previous year)
• From 1 April 2026 for all entities

Challenges related to the implementation of the system

The key challenge associated with the regulation is ensuring the accuracy and completeness of the data contained in the e-invoice.

Adapting a company to issue and receive e-invoices will not only require the implementation of modifications to IT systems but also the introduction of appropriate changes to business processes for issuing, receiving and circulating invoices, as well as to contracts and regulations.

KSef vs. the VIDA package

The Ministry of Finance has no plans to abandon the mandatory implementation of KSeF or to postpone it until the EU legislation related to the so-called VIDA package comes into force.

ViDA (VAT in the Digital Age) is a package published on 8 December 2022 by the European Commission, which is linked to the EU’s goal of establishing a smoothly functioning internal market within VAT, which involves mandatory e-invoicing in the EU.

The Ministry of Finance assures that the implementation of the ViDA package will not change the functionality of KSeF. According to the Ministry, the Polish system will be able to meet the requirements for issuing e-invoices and the reporting data for EU purposes. Furthermore, it out that the EU e-invoice format under ViDA will be mostly mandatory for cross-border transactions, while KSeF will remain a national tool.

For further information please contact:

Hubert Kaczyński, Tax Advisor, ECOVIS Poland, Warszawa, Poland
Email: hubert.kaczynski@ecovis.pl

Sustainable tax Türkiye: Tax instruments on the path to sustainability

With the tax instruments gradually introduced over the years to promote sustainability, Türkiye aims to move closer to global climate targets and align with EU regulations such as the Carbon Border Adjustment Mechanism (CBAM).

The concept of sustainability is no longer limited to environmental policies; it has become central to tax policy as well. Sustainable tax practices are not only designed to raise public revenues but also to promote environmental protection, social justice, and economic stability. This is particularly critical for developing countries like Türkiye, where climate challenges and income inequality are prominent.

Sustainable tax instruments in Türkiye

Türkiye has introduced several tax instruments to support sustainability:

• Environmental cleaning tax (ÇTV): Collected via water bills by municipalities, this tax funds waste collection and environmental services.
• Motor vehicles tax (MTV): Vehicle emissions have been included in the tax calculation since 2018.
• Plastic bag fee: Introduced in 2019, single-use plastic bags are sold for TRY 0.50 to reduce consumption.
• Energy efficiency incentives: VAT and SCT exemptions are offered for renewable energy investments and energy-efficient products.

In 2025, Türkiye’s Banking Regulation and Supervision Agency (BRSA) introduced the green asset ratio, encouraging banks to finance environmentally sustainable projects. Additionally, mandatory sustainability reporting was introduced in 2024 for large companies exceeding certain thresholds in assets, revenue or employment.

Contact us if you have any tax-related questions concerning environmental and sustainability issues.

Mustafa Bulut, CPA, Partner, ECOVIS DİPLOMAT DENETİM VE YMM A.S., Izmir, Türkiye

Why is it relevant now?

Türkiye aims to align with global climate goals while adapting to EU regulations such as the CBAM. At the same time, its current tax structure relies heavily on indirect taxes – over 65% of total revenue – placing a greater burden on low-income groups. At the same time, environmental taxes account for only 1.2% of total revenue, far below the EU average of 2.4%. These figures highlight the urgent need for a shift towards more equitable and sustainable taxation.

Conclusion and recommendations

To achieve its green transformation and economic resilience, Türkiye must restructure its tax system. This includes increasing environmental taxes, shifting to direct taxes such as income and wealth taxes, incentivising green investments and combating informality using digital tools. These reforms would not only support climate goals but also promote social equity and long-term fiscal balance, say the Ecovis advisors.

For further information please contact:

Mustafa Bulut, CPA, Partner, ECOVIS DİPLOMAT DENETİM VE YMM A.S., Izmir, Türkiye
Email: mbulut@diplomatymm.com.tr

Efil Çetin, CPA, ECOVIS DİPLOMAT DENETİM VE YMM A.S., Izmir, Türkiye
Email: ecetin@diplomatymm.com.tr

Buying property in Hungary as a foreigner: Rules and regulations

Foreign natural or legal persons must obtain a permit if they wish to purchase real estate in Hungary. However, there are numerous exceptions. The Ecovis consultants explain what these are and what documents must be submitted for approval.

The acquisition of real estate by foreigners in Hungary is governed mainly by the “Act on certain rules for the lease and disposal of flats and premises” and the government decree on the “acquisitions by foreigners of real estate other than agricultural and forestry land.”

US expats in France: Navigating trust reporting obligations

US expats living in France must comply with their trust reporting obligations. Failure to do so can result in severe penalties. The Ecovis experts know what to do to ensure legally compliant implementation of these requirements.

Unlike most common law countries (USA, UK, Canada in particular), French law does not recognise the existence of trusts. The assets held in such trusts and the income they generate may be seen as being held and received directly by the trust beneficiaries.

US citizens in particular living in France need to be aware of their ongoing tax obligations. One of the most important yet often overlooked areas involves US reporting requirements for trusts, in which a US citizen is involved, either as a beneficiary, trustee, or through foreign assets (please note that this obligation is also triggered when one of the assets placed in trust is located in France).

Which declarations must be made

There are two specific declarations to be made: a declaration of the market value of the items placed in trust and an eventual declaration, for example if there is a change affecting the trustees or beneficiaries of the trust, or if any changes are made to the trust deeds. The triggering event for this obligation is assessed on 1 January of a given year, and the deadline is generally in June of the same year.

The Ecovis experts recommend that affected US expats should definitely consult a tax attorney specialising in cross-border matters. This is the only way to ensure that the complex obligations are fulfilled, especially with regard to foreign trusts, in a tax-efficient manner.

If you need advice on trust reporting or other tax matters, please contact us.

Nicolas Savoy, Lawyer, ECOVIS CF Société d’Avocats, Paris, France

Working in Vietnam as a foreigner: What companies and employees need to know

Foreign workers wanting to work in Vietnam must go through a complex process to obtain a work permit. Companies that want to hire foreign workers also have numerous obligations to fulfil. The Ecovis experts explain exactly what these obligations are.

Conditions for foreigners to work legally in Vietnam

According to the provisions of the 2019 Vietnamese Labour Law, numerous conditions must be met in order to work legally in Vietnam. Foreigners must:

• Be at least 18 years old and possess full civil capacity
• Provide evidence of any relevant professional qualifications, technical skills or work experience
• Meet health standards set by the Ministry of Health
• Not be serving a criminal sentence or be under criminal investigation in Vietnam or any other country. A clean criminal record is necessary.
• Obtain a work permit issued by the Vietnamese authorities, unless exempted under specific regulations

Required documentation for foreign workers in Vietnam

Foreign workers applying for a work permit in Vietnam must submit the following documents:

• A certified copy of a valid passport, which must comply with Vietnamese legal requirements
• A health certificate which must be issued by a competent medical authority in Vietnam or abroad and be valid for up to 12 months
• A criminal record certificate issued by a competent authority in Vietnam or abroad no more than 6 months prior to the date of submission
• Documents verifying the applicant’s status as a manager, executive director, expert, technical worker or other regulated professional
• Confirmation from the Home Affairs Department on the approval of the enterprise’s demand for employing foreign workers
• Two recent passport-sized photos, which must be taken within six months before submission
• Legal documents from the employer such as an enterprise registration certificate, company charter, etc.
• Power of attorney for the applicant and the applicant’s legal documents

Important note: The law requires that all foreign-issued documents must be legalised, notarised and translated into Vietnamese.

Ecovis' team of experienced lawyers supports employers and foreign workers in applying for a work permit – from the job advertisement to the application for a criminal record check and the submission of the application.

Vu Manh Quynh, Managing Partner, ECOVIS Vietnam Law, Ho Chi Minh City, Vietnam

Work permit process for foreign workers in Vietnam

Step 1: Recruitment and candidate search (within 30 days)

Employers must conduct a recruitment process within 30 days, which includes posting job vacancies on the official labour portals (Ho Chi Minh City: https://vieclamhcm.com.vn/ or Hanoi: https://vieclamhanoi.net/trang-chu), searching for candidates, and conducting interviews. This process ensures that domestic workers are given priority before hiring foreign employees.

Step 2: Approval of foreign labour use (10 working days processing time)

If they wish to employ foreign workers, the employer must submit an explanation of the demand or of the change in foreign employment demand, depending on their situation.

Step 3: Work permit application (5 working days processing time)

Once approval is granted, the employee must submit a work permit application with all the required documentation as listed above. If the application is valid, it will be processed within 5 working days.

For further information please contact:

Vu Manh Quynh, Managing Partner, ECOVIS Vietnam Law, Ho Chi Minh City, Vietnam
Email: quynh.vu@ecovislaw.vn

Nguyen Nhuan, Partner, ECOVIS Vietnam Law, Ho Chi Minh City, Vietnam
Email: nhuan.nguyen@ecovislaw.vn

Tax audit in Peru: When contradictions and inconsistencies invalidate tax authority’s assessments

Growing pressure to collect tax revenue has intensified audit activity in Peru. This has led to significant inconsistencies in the assessments of the Peruvian National Superintendence of Customs and Tax Administration (SUNAT). However, a recent ruling by the tax court demonstrates that legal coherence remains essential. The Ecovis consultants explain and evaluate the ruling.

In recent months, Peruvian taxpayers have experienced an unprecedented wave of tax audits. The aggressiveness of SUNAT’s verification procedures — particularly towards formal and compliant businesses — has reached levels not previously seen. This heightened scrutiny appears closely tied to the tax administration’s efforts to meet its ambitious revenue targets for fiscal year 2025.

While such goals may be fiscally justified, the means of achieving them must still respect fundamental legal principles. This was reinforced by tax tribunal decision no. 6435-12-2024, which invalidated an income tax adjustment on the grounds of logical inconsistency in the tax authority’s arguments.

Contradictory grounds for disallowance

The case at hand reveals a serious contradiction in SUNAT’s assessment. On one hand, the tax authority rejected the deduction of certain service expenses by asserting that the services had not been rendered (questioning item by item the evidentiary support). On the other hand, it also claimed that such services were not causally linked to the generation of taxable income, implicitly acknowledging their occurrence.

This double argument – both denying the transaction’s existence and simultaneously analysing its relevance – was found to be legally incoherent.

The tax tribunal ruled in favour of the taxpayer, concluding that the adjustment lacked a rational, non-contradictory foundation and therefore was “not in accordance with the law.” Consequently, it ordered the annulment of the challenged portion of the tax assessment.

We challenge inconsistent tax rulings or incorrect assessments by the Peruvian tax authorities for you.

Octavio Salazar Mesias, Partner, ECOVIS Peru, Lima, Peru

Legal framework and the principle of congruence

This ruling upholds the constitutional requirement that tax assessments and administrative actions observe the principle of congruence, meaning arguments must be coherent and logically structured. This principle has been recognised by the Peruvian Constitutional Court in case no. 00487-2022-PHC/TC, which affirmed that inconsistencies in administrative reasoning may result in violations of due process.

The tribunal’s decision adds to a growing body of precedents (e.g., resolutions nos. 0297-5-2017, 05788-8-2021 and 0366-11-2023) that stress the need for rational legal justification in tax controversies. These rulings remind both taxpayers and SUNAT that enforcement cannot disregard legal certainty in favour of collection efficiency.

Conclusion: towards balanced tax enforcement

The decision marks a key moment for the defence of legal rationality in tax audits. While fiscal pressure may drive more rigorous controls, contradictions in assessments cannot be tolerated. For both multinational and domestic taxpayers operating in Peru, this case reinforces the importance of challenging tax determinations that lack consistent logic or violate due process principles.

For further information please contact:

Octavio Salazar Mesias, Partner, ECOVIS Peru, Lima, Peru
Email: octavio.salazar@ecovis.com.pe

Capital market Greece: Modernised with EU-aligned reforms

The Hellenic Parliament has approved a new bill introduced by the Hellenic Capital Market Commission (HCMC). It brings substantial regulatory updates in line with European Union (EU) directives and international best international practices. The Ecovis consultants know what changes are being made to strengthen the capital market and what companies need to consider.

This reform seeks to enhance transparency, investor protection, and the overall efficiency of the Greek capital market. Among its key provisions are stricter corporate governance requirements, clearer obligations for market participants, and more robust supervisory powers for the HCMC. The bill also aligns domestic regulation with the latest EU financial legislation, such as MiFID II and the European Green Deal initiatives.

Key measures to strengthen the capital market

• Legislative amendments on securities: A simplified listing process for securities, including foreign issuers
• Institutional framework for UCITS and alternative investment funds
• The Introduction of liquidity management tools:
  • swing pricing
  • redemption gates
  • notice periods
• Enhanced tax deductions for SME listing costs on regulated markets: Reduced interest income tax on listed corporate bonds
• Strengthening supervisory authorities:
  • Implementation of mystery shopping by the HCMC and the Bank of Greece
  • Mandatory certification for investment service providers
  • Closer cooperation with EU regulatory bodies
• Legal framework for crypto assets: Establishment of competent authorities in Greece for crypto-asset markets
• Investor protection and supervision are aligned with EU Regulation 2023/1114
• Green Bonds: Framework for the categorisation and supervision of European green bonds
• Tax relief for angel investors and investments in Greece’s Alternative Market
• SMEs listing on the Athens Stock Exchange will benefit from a substantial reduction on eligible listing-related expenses

Consider how the new regulatory changes impact your capital raising, compliance obligations, or investment strategies. We're here to help.

Dimitrios Leventakis, Managing Partner, Certified Internal Auditor – IBFD Certified Tax Advisor, ECOVIS HELLAS Ltd., Athens, Greece

The new framework is expected to improve investor confidence, attract more foreign investments and contribute to the long-term competitiveness of the Greek financial sector.

For further information please contact:

Dimitrios Leventakis, Managing Partner, Certified Internal Auditor – IBFD Certified Tax Advisor, ECOVIS HELLAS Ltd., Athens, Greece
Email: dimitrios.leventakis@ecovis.com

Vasilis Giamenis, Corporate/Legal Department, ECOVIS HELLAS Ltd., Athens, Greece
Email: corporate.department@ecovis.gr