Irish VAT Grouping: Key changes effective from the 19th of November 2025

The Irish Revenue Commissioners has issued updated VAT grouping guidance which became effective on the 19th of November 2025. This guidance has significantly narrowed the territorial scope of Irish VAT Groups. VAT grouping is now only available to establishments located within the State of Ireland. This updated guidance has immediate effect for any VAT groups formed on or after the 19th of November 2025. A transitional period may be allowed for existing groups up to the 31st of December 2026.

These changes bring Ireland closer to EU standards following recent Court of Justice of the European Union (CJEU) rulings in Skandia and Danske Bank.

This is of significant importance when considering arrangements between head offices and branches. Only a head office or branch which is established in Ireland is entitled to be a member of an Irish VAT group. Non-Irish head offices or branches may not be included as members of an Irish VAT group. This means certain intra-company transactions, such as services between an Irish branch and an overseas head office, could become subject to Irish VAT.

Businesses are advised to start reviewing their VAT group structures and intra-entity transactions. Any existing VAT Groups impacted by this change can contact us here at Accounting Bureau and we will be more than happy to assist in contacting Revenue to agree suitable transitional arrangements to ensure compliance with this guidance. This guidance is to be implemented by existing VAT Groups by the 31st of December 2026.  

Some examples scenarios are outlined below:

Example 1:

Company X and company Y form an Irish VAT group. Company X has a branch in another EU member state. Company Y supplies services directly to that non-Irish branch of company X. These supplies are within the scope of VAT as the non-Irish branch is not a member of the VAT group. The place of supply is where the branch is established, and the VAT group can claim deductibility on inputs if the supply is a ‘qualifying activity’.

Example 2:

Company X and an Irish branch of company Y form a VAT group. The head office of company Y is located in another EU member state. The head office of company Y supplies services to the VAT group. The supplies of services are within the scope of VAT and the VAT group must account for the Irish VAT on the reverse charge basis to the extent such supplies are taxable.

‍