9 December 2025
Irish Revenue tightens VAT grouping rules: territorial scope restricted
On 19 November 2025, Irish Revenue updated its interpretation of VAT grouping rules to align with EU case law (Skandia and Danske Bank). The key change: VAT groups in Ireland are now limited to entities established in Ireland. Overseas branches or head offices of Irish entities can no longer be part of an Irish VAT group.
This means transactions between Irish and non-Irish establishments will no longer be disregarded for VAT purposes. Supplies from foreign head offices or branches to Irish VAT groups may now trigger reverse charge VAT obligations.
The update applies immediately for new VAT groups and from 1 January 2027 for existing groups, allowing a transitional period until 31 December 2026. Businesses with cross-border structures must review VAT recovery positions and compliance processes urgently.
Key takeaway
Multinationals and groups using branches combined with VAT grouping should reassess structures now. Identify intra-group transactions involving non-Irish establishments and model VAT cost impacts. Consider system changes for reverse charge compliance and update contracts. Early planning will mitigate unexpected VAT liabilities and ensure compliance before transitional relief ends.