New Irish Revenue Guidance on application of VAT Group rules

November 27, 2025 EU VAT Update

The Irish Revenue has announced a major change to VAT grouping rules, effective from 19 November 2025.

Key changes and updates to Irish VAT-Group Rules:  

  • Irish VAT groups are now restricted to Irish establishments only (i.e. Irish head offices or Irish branches).
  • Non-Irish branches or non-Irish head offices are now excluded hence can no longer be members of an Irish VAT group.
  • Intra-group transactions involving non-Irish establishments will no longer be disregarded for Irish VAT purposes.
  • The guidance has immediate effect for any VAT Groups formed after its publication of 19 November and must be implemented by all existing VAT Groups no later than 31 December 2026.

Impact of Foreign VAT Group Membership

 Because non-Irish establishments are excluded from the Irish VAT group, supplies (especially services) between an Irish establishment and its non-Irish establishment are no longer disregarded for Irish VAT purposes, which means that Irish VAT could apply to such intra-entity services (meaning that the Irish entity would self- account for Irish VAT on services received) unless they are otherwise VAT-exempt.

However, if a non-Irish establishment (e.g., company in another EU Member State) is part of a VAT group in, normal VAT rules will now apply.

For example, services from a UK branch to its Irish head office which is a member of an Irish VAT group may become subject to VAT (subject to reverse charge and self-accounted for by the Irish recipient) as a result of these changes.

Transitional Period

 As per introduction above, the changes apply immediately for VAT groups formed from 19 November 2025, however it is welcomed that the Irish Revenue has granted a transitional period that runs until 31 December 2026 for existing groups to allow same to review the Irish VAT treatment of intra-group transactions involving the Irish establishment and possibly renegotiate or re-model intra-group arrangements.

Implications / Risks for Businesses;

  • Increased VAT Exposure
  • Impact on VAT recoverability
  • Correct Reverse charge application
  • Reporting and compliance obligations

Next Steps for Businesses

If your business is affected by these changes, it’s important to act quickly. If your company is affected by this update and requires additional information, please do not hesitate to get in touch.

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