BDO Indirect Tax News

Introduction

The global indirect tax landscape is undergoing a period of rapid recalibration, with authorities across jurisdictions tightening frameworks, modernising compliance and sharpening their focus on economic substance. Recent developments—from e-invoicing mandates to VAT grouping reforms and evolving interpretations of intermediary rules—underscore a clear trend: VAT outcomes are increasingly driven by how businesses actually operate, not how arrangements are drafted.

In the UAE, the UAE Ministry of Finance has taken a measured step by extending the Accredited Service Provider appointment deadline to 30 October 2026 for large taxpayers, while maintaining the 1 January 2027 e-invoicing go-live date. The extension provides additional preparation time rather than a reprieve—systems upgrades, process redesigns and data readiness remain critical priorities as penalties loom for late or incomplete compliance.

Botswana is embarking on its most significant VAT overhaul in years. Effective 1 June 2026, remote digital services fall squarely within the VAT net, government entities and large unregistered businesses face reverse charge obligations, and electronic fiscal devices become mandatory for all VAT registrants. With registration deadlines already in motion, businesses have a narrow window to align systems and processes.

Germany is preparing for a structural rethink of VAT grouping. Under consultation, the Annual Tax Act 2026 would replace automatic “Organschaft” formation with an explicit declaration requirement and confirm the eligibility of partnerships, aligning domestic rules with recent EU and Federal Fiscal Court decisions. If enacted, the new regime would take effect from 2029, offering clarity but also demanding proactive group-level governance. 

In Spain, recent decisions of the General Directorate of Taxes and the Central Economic-Administrative Court reinforce a substance-driven approach to VAT exemptions and special regimes. Whether in healthcare, financial services or business transfers, the authorities continue to prioritise economic reality over contractual form—an approach increasingly mirrored across Europe.

At the EU level, recent case law and administrative guidance signal a broader and more expansive interpretation of intermediary and commissionaire arrangements. The focus is shifting away from formalities—such as whose name appears on the invoice—and towards the intermediary’s actual authority, involvement and control over essential elements of a transaction. Where intermediaries influence pricing, terms or execution, they may be treated as commissionaires, triggering a fictitious chain of supplies and shifting VAT liability, invoicing flows and registration obligations. For platforms, digital business models and cross‑border operators, this substance‑driven interpretation raises material compliance and structural considerations.

Taken together, these developments point to a clear direction: VAT frameworks are becoming more explicit, more digital and more focused on substance. Businesses that proactively reassess their operating models, contractual arrangements and compliance infrastructure will be best positioned to navigate an increasingly demanding global environment.