Regulations and guidance for a Variable Direct Debit (VDD) scheme implemented by the Irish Revenue

January 19, 2026 EU VAT Update

In August 2025, the Irish Revenue published a Variable Direct Debit (VDD) system for  VAT payments on ROS, which replaces the current Fixed Direct Debit (FDD) option, allowing the Revenue to automatically collect the VAT balance due on current date.

Under new regulation, the Fixed Direct Debit scheme for VAT ceased in June 2025 as the new Variable Direct Debit system will replace it.

Via the Fixed Direct Debit, Businesses agreed a fixed monthly payment amount to be debited from their bank account toward their VAT liability during the year and, at the end of the VAT period, any difference between the fixed payment and the VAT due had to be reconciled.

The key point of the new system is the authorisation given by taxpayers for the Irish Revenue to debit the exact outstanding tax amount from a taxpayer’s bank account on the due date, allowing a more timing aligned payment.

How VDD Works in Practice

  • Once a VDD mandate is set up through ROS, Revenue will automatically debit the exact tax amount due on or around the third last working day before the payment date.
  • The system ensures taxpayers pay the correct amount at the correct time, reducing potential interest charges from late or incorrect payments.
  • Taxpayers can amend or cancel a VDD at any time through ROS.

 Implementation Timeline

  • From 11 August 2025, Revenue introduced the ability to set up a VDD for current VAT liabilities via ROS as part of a broader Direct Debit Modernisation project.
  • Between August 2025 and end March 2026, Information letters are sent to affected VAT-registered businesses;
  • Until April 2026: Transition notices issued as each annual VAT period closes.

If your company is eligible for the new scheme and you require any assistance or additional information regarding same, please do not hesitate to get in touch with us.

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