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Key VAT changes

• Romania’s standard VAT rate will rise from 19% to 21%. This marks the first increase in the standard rate since it was reduced in 2017 and aligns with broader regional fiscal tightening trends.
• A new reduced VAT rate of 11% will replace most current reduced rates, including the widely used 5% and 9% rates. This leaves only two applicable VAT rates in the Romanian system going forward:
  • 21% – Standard rate
  • 11% – Reduced rate

What falls under the 11% VAT rate?

The following goods and services will shift to the 11% reduced rate:

• Food
• Medicines
• Books and printed publications
• Water services
• Hotel accommodation and restaurant services

This adjustment is expected to affect pricing and compliance across multiple sectors, particularly in retail, hospitality, and healthcare.

There is a temporary exemption for certain housing supplies. These will retain the 9% VAT rate until August 1, 2026, offering a transitional period for developers and real estate businesses to adapt.

Potential future adjustments

The Romanian government has indicated that the VAT rate for hotel and restaurant services could rise to 21% in the future, subject to further review. Businesses in these sectors should closely monitor legislative developments in the coming months.

Implications for businesses

These VAT changes will require updates to invoicing systems, pricing strategies, and compliance processes. Businesses supplying or purchasing goods and services in Romania should review their contracts and systems to prepare for the new rates.

For more detailed analysis, see: https://mfinante.gov.ro/static/10/Mfp/transparenta/proiectLegemasurifiscale_03072025.pdf

The importance of VAT registration in Mexico for your business

Entering the Mexican market provides your business with access to a large consumer base of over 126 million people, 67% of whom shop online. Prominent marketplaces such as Amazon and Mercado Libre maintain a strong presence in the region and enable direct sales from the European Union. Selling in Mexico also facilitates simplified export to the US and Canada, as Mexico is part of the USMCA free trade zone – all while offering significantly lower entry costs than direct expansion into the US.

Who should consider VAT registration in Mexico?

This service is the right fit for your business if you:

• are planning to expand beyond Europe, especially into Latin America,
• are considering B2C sales to Mexico via your own store, Amazon, or Mercado Libre,
• want to operate legally and handle VAT in full compliance with local regulations,
• don’t yet have a structure or registration in Mexico and require comprehensive support from day one,
• are looking for a reliable partner to guide you through the registration and compliance process step by step.

EFF’s end-to-end VAT support in Mexico

• VAT registration in Mexico,
• Submission of required declarations and reports,
• Liaison with local tax authorities (SAT – Servicio de Administración Tributaria),
• Advisory support regarding e-invoicing and local compliance requirements.

Our specialists will guide you through every step of your market entry into Mexico – get in touch with us to learn more.

These taxonomies were designed to drive investment in “green” projects by labelling certain activities as “sustainable” through evidence-based classification. However, critics argue that these frameworks can be overly burdensome for companies and are not practical. 

UK’s green Taxonomy – the timeline

• 2020
  UK Chancellor of the Exchequer, Rishi Sunak, proposed several sustainable finance measures, including a green taxonomy to provide a common framework for understanding economic activities in the transition to a more sustainable economy and meet environmental targets. 
• 2021
  The Green Technical Advisory Group (GTAG) was launched to advise the government on implementing the taxonomy and published its first updates later that year, recommending alignment with the EU Taxonomy but tailored to UK priorities. 
• 2022
  In late 2022, the government announced that it was struggling to develop the secondary legislation due to its complexity and a lack of regulatory bandwidth to adequately consider all relevant sectors. 
• 2024-25

  The consultation was open for twelve weeks, from mid-November of 2024 until early-February of 2025. They received only 150 responses, with the largest group (59) coming from the financial services sector. Trade bodies also represented a large input (57), but other sectors also offered feedback. 

  Only about 45% of respondents had a favourable view of the taxonomy, with 55% holding a mixed or negative view. Many cited concerns over “the real-world application” while others argued that other elements of the sustainable finance framework should take priority. 

• 2025
  The government decided, based on the consultation results, to drop its efforts to develop the green taxonomy, proposing to focus on other avenues toward its environmental targets. 

Reactions

Reactions to the decision are mixed. The UK Sustainable Investment and Finance Association deemed it “disappointing” to omit the green taxonomy from the broader UK sustainable finance framework. Their head of policy and regulatory affairs, Oscar Warwick Thompson, stated, “We now want to see swift delivery of commitments on transition plans and the sustainability reporting standards.” Meanwhile, head of responsible investment at wealth manager Quilter Cheviot, Gemma Woodward, was relieved by the decision, claiming that the industry is already overwhelmed by other legislation. 

Conclusion

It remains to be seen what the next steps are for sustainable finance in the UK, but this decision comes as the EU is also simplifying its Taxonomy, among other elements of the EU Green Deal earlier this year.  

Sources:

– Britain scraps ‘taxonomy’ plan for green investments. (July 2025). Virginia Furness for Reuters.
– Consultation Outcome: UK Green Taxonomy. (July 2025). UK Government. 
– Green Technical Advisory Group issues first recommendations to UK government on the Green Taxonomy. (October 2021). Raza Naeem, Victoria Hickman, and Stephen Clipsham for Linklaters. 
– New amendments simplify EU Taxonomy. (July 2025). Jan A. Müller for KPMG. 
– New independent group to help tackle ‘greenwashing’. (June 2021). UK Government.
– The UK Green Taxonomy. (January 2023). KPMG. 
– UK Becomes First Country in the World to Make TCFD-aligned Disclosure Mandatory. (November 2020). Mark Segal for ESG Today. 
– UK Drops Plans for Sustainable Finance Taxonomy. (July 2025). Mark Segal for ESG Today. 
– UK Green Taxonomy Consultation Response. (July 2025). UK Treasury. 
– UK Green Taxonomy Dies As Sustainability Regulations Face Global Pushback. (July 2025). Jon McGowan for Forbes. 

Simplified Invoices for Small Businesses – SME procedure

The new regulations allow small businesses to benefit from VAT exemption throughout the EU via the SME procedure. Entrepreneurs who meet the specified criteria may issue simplified invoices. What must a simplified invoice include?

• Date of issuance
• Sequential invoice number
• Names (or full names) and addresses of both the taxpayer and the buyer
• Description (type) of goods or services
• Unit of measure and quantity of goods delivered or scope of services performed
• Unit price of goods or services
• Total amount due
• EX identification number

What is the EX number on a simplified invoice?

The EX number is an individual identification number assigned by the country of establishment of the business. It entitles the business to use the exemption within Poland, according to Article 113a(2)(2) of the VAT Act. To obtain it, an SME must submit a registration request for the SME procedure to the tax authority, attaching documents confirming its small business status. Failure to provide the EX number may render the invoice non-compliant with the law.

Conditions for using the SME procedure

To benefit from the SME procedure, a business must:

• Implement the procedure’s rules in its country of establishment
• Not exceed the EU turnover limit – a maximum of €100,000 excluding VAT
• Possess an EX identification number
• Submit an appropriate application to the tax office
• Meet the requirements for small business status

The status of a small business in the context of VAT (so-called small VAT taxpayer) is primarily regulated by Article 2(25) of the Act of March 11, 2004, on Goods and Services Tax (consolidated version: Journal of Laws 2024, item 361, as amended).

VAT invoices issued by member states

According to Article 1(5) of Directive 2020/285, which amended the VAT Directive (Council Directive 2006/112/EC), a new point (c) was added to Article 220a(1), stating that EU Member States are required to allow taxpayers to issue simplified invoices when using the small business exemption, even if business activity is conducted outside the taxpayer’s country of establishment. The invoice or note considered as an invoice must refer to the original invoice and specify the amended data.

In summary, the 2025 VAT invoicing changes introduce the SME procedure, enabling small businesses to benefit from VAT exemption throughout the EU. This requires meeting specific conditions and obtaining an EX identification number in order to issue simplified invoices in compliance with the new regulations.

What is the OSS procedure?

The OSS procedure is a system that allows businesses to settle VAT on cross-border B2C (business-to-consumer) sales in a single EU Member State, referred to as the “Member State of identification.” OSS covers:

• Sales of services (e.g., digital, telecommunication) to consumers in the EU
• Intra-community distance sales of goods (WSTO) above the €10,000 annual threshold
• Imports of goods valued up to €150 (import scheme – IOSS)

It replaces the previous MOSS system by expanding its scope to more transactions.

Who can use the OSS?

The OSS procedure is available to:

• EU businesses: VAT-registered companies in the EU conducting B2C sales in other EU countries (Union scheme)
• Non-EU businesses: Companies without an EU establishment, selling goods or services to EU consumers (non-Union or import schemes)
• Online platforms: Entities facilitating online sales, considered “deemed suppliers” for VAT purposes

Eligibility requires either exceeding the €10,000 cross-border sales threshold or opting in voluntarily.

How to register for OSS

To register for the OSS procedure in Poland, a company must:

• Complete and electronically submit form VIU-R to the Second Tax Office Warsaw-Śródmieście
• Receive confirmation upon successful verification
• Registration becomes effective from the first day of the quarter following the quarter in which the application was submitted
• After registration, the taxpayer gains access to the OSS portal (in Poland, via the e-Tax Office)

The process typically takes 2–4 weeks, and registration is effective from the start of the next quarter.

OSS declaration frequency and deadlines

Companies using OSS must file quarterly VAT returns (form VIU-DO) by the end of the month following the end of each quarter (e.g., Q1 deadline is April 30). Returns must be filed electronically, even if no transactions occurred during the quarter (i.e., a “zero return”).

OSS Payments

VAT payments under the Union, non-Union (OSS), and import (IOSS) schemes follow special procedures. After submitting the VAT return, the taxpayer receives a unique reference number (UNR). VAT must be paid in EUR to the account of the Second Tax Office Warsaw-Śródmieście, which provides separate accounts for domestic and foreign payments.

Penalties for OSS non-compliance

Penalties for OSS violations (e.g., late returns, unpaid taxes) are imposed by the consumer’s country, according to their laws. Repeated failures to file (three consecutive missed returns despite reminders) lead to a 2-year exclusion from OSS. In Poland, penalties for not filing OSS returns range from PLN 430 to 86,000 (per Article 56 §4 of the Fiscal Penal Code), and late VAT payments incur interest (16.5% annually in 2025). Penalties vary across the EU—for example, up to €25,000 in Germany for administrative violations. OSS exclusion forces the company to register for VAT in each consumer’s country.

In summary, the OSS procedure significantly simplifies VAT settlement for cross-border businesses but requires strict adherence to deadlines and local VAT rates. Professional support and software help avoid penalties and optimize operations

Key elements of the proposal

• Income Tax Changes: Both individual and corporate income tax rates are set to rise from 22% to 24%. In addition, the temporary security tax component, which had been part of the income tax structure, would be removed.
• Business Income Tax: The tax rate on business income would increase from 20% to 22%.
• Value-Added Tax (VAT): The standard VAT rate would be raised from 22% to 24%, effective July 1, 2025. Unlike the income tax adjustments, this change is intended to be permanent.

The proposed legislation is part of a broader effort by the Estonian government to implement fiscal reforms aimed at strengthening the national budget. The government has stated that these measures are necessary to support long-term financial stability.

Further details can be found in the full bill text available on the official Riigikogu website: Bill No. 645 SE

Optimization of accounting processes

Cloud accounting is a modern method of managing a company’s finances, significantly different from traditional approaches. The fundamental difference lies in the use of cloud computing technology for storing and processing accounting data. This infrastructure allows access to financial information from anywhere in the world, at any time, which is impossible under the classical model where data is typically stored locally on company servers or computers.

The core of cloud accounting is an online-based application that integrates various functionalities—from invoicing to payment management and liquidity monitoring. By using the internet, users can log into the system from any device with network access, resulting in significantly greater flexibility in managing a company’s finances.

The difference between traditional and cloud-based accounting is also evident in data security. While local servers might seem more secure due to data being physically “on-site,” cloud systems offer advanced encryption mechanisms and constant security monitoring, often exceeding the capabilities of small and medium-sized enterprises.

Moreover, cloud accounting is more scalable. Companies can flexibly adjust required resources (storage space, computing power) depending on current needs, which is difficult to achieve in traditional systems. This enables savings and operational cost optimization, especially for growing businesses.

Why EPR is a Gamechanger for Packaging

Traditionally, the environmental impact of packaging was managed at the end of its life — collected, sorted, and (hopefully) recycled. EPR turns that model on its head. By making producers financially and legally responsible for the full lifecycle of their packaging, the EU aims to drastically reduce waste and increase resource efficiency.

Under the proposed Packaging and Packaging Waste Regulation (PPWR), packaging that cannot be reused or recycled will be restricted from the EU market by 2030 (European Commission, 2022). This includes new design-for-recyclability requirements, reuse targets, and volume reduction rules — all linked directly to EPR compliance and cost.

Here’s how this EU legislation is changing packaging design

Easy waste management first:

• Packaging must be recyclable in practice and at scale by 2030, according to the PPWR, though rates vary by category.
• This is pushing a shift away from complex, multi-layer materials toward mono-materials like PE, PP, and PET and packaging will require labelling with materials and waste management instructions.
• There is a move away from dark-colored plastics that disrupt sorting systems.
• Other packaging types, such as filter coffee pods, must be compostable by early 2027.

Reuse in rising:

• The PPWR introduces binding reuse targets for food and beverage packaging — 10% to 20% by 2030 in many cases, but excluding certain materials such as cardboard.
• This change is driving innovation in reusable formats and return logistics, especially in takeaway and catering.

Less is more:

• Packaging must now minimize empty space (no more than 40% of volume) and reduce material weight. Likewise, there is a maximum 50% empty space ratio for grouped, transport, and e-commerce packaging.
• Companies are redesigning formats to optimize efficiency — less space, less waste, lower fees.
• Packaging misleading consumers into thinking the product is larger than it actually will be banned (e.g. double walls, false bottoms).

What this means for brands (and suppliers)

For packaging producers and their clients, this shift is both a challenge and a chance. Non-compliant packaging will face higher costs — or be removed from the market altogether. But proactive design can:

• Lower EPR fees
• Improve ESG scores
• Meet consumer expectations for sustainability
• Avoid regulatory and reputational risks

And for suppliers? Those who support their clients in achieving compliance — through smarter design, sustainable materials, and transparent reporting — will be invaluable partners.

Sources:

– DS Smith. (2024, May). PPWR: The Packaging and Packaging Waste Regulation Explained. 

– (2024, January). Packaging Waste: PPWR — What You Need to Know. 

– (2024, February). Important Changes in the EU to Rules on Packaging and Packaging Waste. 

ESG implementation in e-commerce – a practical guide for businesses

A well-planned ESG strategy helps build a resilient and trusted e-commerce business. More importantly, it can have a direct, positive impact on financial performance.

What is ESG and Why Should It Matter in E-Commerce?

• ESG stands for Environmental, Social, and Governance – a set of practices designed to foster environmental responsibility, social accountability, and corporate governance integrity.
• When implemented effectively, ESG not only demonstrates responsibility but also enhances competitiveness, mitigates risk, and builds stronger customer loyalty.

Sustainable logistics and distribution in e-commerce – practical actions

Optimizing distribution is one of the most effective ways to reduce your online store’s carbon footprint.

How can you make deliveries more environmentally friendly?

• Use electric delivery vehicles, especially in urban areas and for short distances.
• Partner with local suppliers to shorten the supply chain and reduce emissions.
• Implement renewable energy sources in logistics centers and offices.
• Plan delivery routes smartly using process optimization tools.
• Decarbonize your supply chains gradually, introducing changes in phases.

Eco-friendly packaging and storage for online retailers

Sustainable packaging and efficient warehousing are key to reducing waste and improving operational performance.

What changes should you consider in packaging and warehousing?

• Ship products in recyclable, eco-friendly packaging.
• Use reusable packaging where applicable.
• Communicate your eco-efforts to customers starting from the moment they open their package.
• Optimize energy usage in warehouses by introducing green energy solutions.
• Manage your digital footprint using green hosting and energy-efficient servers.

We’ll help you select and implement ESG-aligned solutions that benefit both your business and the planet.

Designing ESG-compliant offers and reducing return rates

Product offering and customer communication are central to responsible and successful e-commerce.

What can you do to align your product offer with ESG standards?

• Provide detailed product descriptions, including composition, origin, and usage guidelines.
• Include high-quality images and videos to minimize purchase errors.
• Introduce product fitting tools like virtual try-ons or AR visualizations.
• Design products based on customer needs and shopping behavior analytics.
• Clearly label environmentally and socially responsible products to support value-based purchasing.
• Promote circular economy initiatives through repair, return, or recycling programs.

We offer support in ethical product design, ESG-compliant customer communication, and regulatory alignment.

Communication, cybersecurity, and governance – ESG in daily operations

Responsibility also means how you manage your company and protect customer data.

What should you prioritize to run a responsible e-commerce business?

• Ensure transparent communication – transparency is a value in itself.
• Safeguard customer privacy with high cybersecurity standards.
• Develop ethical governance principles that shape your organizational culture.
• Maintain responsible labor practices – both internally and across your supply chain.
• Monitor and report ESG efforts transparently and in accordance with current standards.

With our support, you can automate ESG reporting and implement a management system tailored to your company’s structure.

Summary: ESG is an investment in the future of your business

Sustainable e-commerce is not a passing fad – it’s a strategic response to consumer expectations, regulatory requirements, and increasing competition. It’s also an opportunity to build a strong, resilient, and trusted brand.

Looking to cut emissions and optimize your distribution?

Searching for eco-friendly packaging solutions and smarter warehouse management?

Need help aligning your offer with your customers’ values?

Our experts support you across all areas – from analysis and implementation to regulatory compliance. We tailor solutions to your organization’s structure and strategy. We don’t just help you “comply” – we help you gain a real advantage.

Sustainable growth begins with a decision. If you want your store to operate responsibly, efficiently, and with the future in mind – we’re here to support you.