BDO Indirect Tax News

Introduction

The digital era has brought significant advantages to businesses, enabling them to expand their global footprint and boost operational efficiency through automation. However, these benefits come with new challenges as governments accelerate efforts to modernize their indirect tax systems, particularly in the area of compliance. Countries are adopting digital tax compliance tools like e-invoicing, real-time reporting and advance technology mandates, and expanding the scope of VAT to cover remote sales and services.

E-invoicing and e-reporting are central to compliance reforms. Within the EU, member states are preparing for the full rollout of the VAT in the Digital Age (ViDA) package by 2030, with e-invoicing/e-reporting principal components of this initiative. Belgium, Croatia and France are set to adopt e-invoicing for VAT-registered businesses in 2026. Ireland has published a roadmap to phase in e-invoicing starting in 2028 and Slovakia is gearing up for implementation in 2027. Outside the EU, e-invoicing initiatives are gaining traction, with Angola introducing e-invoicing on 1 October, Bolivia requiring some taxpayers to begin issuing e-invoices by March 2026, Guatemala making e-invoicing a central component of its digital transformation of tax administration, Nigeria setting a compliance deadline of 1 November 2025 for large taxpayers and Norway consulting on its proposed rules.

Several countries have updated their VAT frameworks to address the digital economy:

• Botswana is introducing taxation on remote services and implementing a reverse charge mechanism.
• Brazil is offering tax incentives to data centres while imposing specific compliance obligations on the centres.
• Chile is taxing low-value imports sold to domestic consumers and placing new responsibilities on digital platform operators.

Shifting to other VAT news:

• Belgium has postponed the implementation of “VAT chain” rules, giving businesses more time to prepare and focus on mandatory e-invoicing that will apply in 2026. The government has also revised reduced VAT rate policies to influence consumer behaviour.
• Denmark is expanding the standard VAT rate to include certain fitness and education services.
• Poland has introduced a deposit system aimed at promoting recycling and reuse, presenting new administrative requirements for businesses.
• Spain has clarified the concept of “construction work” in the context of the application of the VAT reverse charge and the supreme court has confirmed that subsidies for public services not tied to service pricing are exempt from VAT.
• Thailand and the United Arab Emirates have issued guidance on input tax apportionment, impacting compliance procedures.

Finally, in tariff news, Canada has lifted retaliatory tariffs on U.S. goods qualifying under the CUSMA, affecting numerous consumer and industrial imports previously subject to 25% tariffs, the European Commission has proposed increased tariffs on steel imports to shield the EU steel industry from global overcapacity and the US awaits a Supreme Court hearing on the legality of the IEEPA tariffs imposed by President Trump following three lower court decisions concluding the tariffs are unlawful.