Revenue revises Irish VAT group rules: implications for businesses in 2026

The Irish Revenue Commissioners have made updates to their guidance relating to Irish VAT group rules in Ireland.

Key updates for 2026 

If a business has establishments (such as a head office and branch) of the same legal entity in both Ireland and abroad and is part of a VAT group in Ireland or another EU member state, it should review its VAT group structuring and intra-group transactions involving its Irish establishment.

The Irish Revenue Commissioners (Revenue) has changed its practice to align Irish VAT group rules with EU case law and the treatment of VAT groups in many other EU member states. Going forward, Irish VAT group rules will only apply to the Irish establishment(s) of VAT group members. Foreign establishments of the same entity will no longer be included within the Irish VAT group. Likewise, belonging to a VAT group in another EU member state may now affect the Irish VAT analysis.

What does this mean for Irish businesses?

Supplies of services between a VAT grouped Irish establishment and its foreign establishment(s) are no longer disregarded and may now be subject to Irish VAT (unless otherwise exempt). This is because an Irish VAT group will now be limited to Irish establishments, and a VAT group is regarded as the same person for VAT purposes. Therefore, supplies between non-Irish establishments and an Irish VAT group will be within the scope of VAT. This may result in additional VAT costs for partially exempt businesses such as banks, insurers and asset managers, among others.

The new rules may also affect supplies between foreign EU establishments and Irish branches, and between UK and Irish establishments.

For Irish VAT groups created on or after 19 November 2025, the change applies immediately. For those existing prior to that date, a transitional period will apply until 31 December 2026.

There have been no changes to VAT practice for intra-entity supplies outside of a VAT group.

Where neither the Irish establishment or foreign counterpart are members of a VAT group in Ireland or elsewhere in the EU, intra-entity supplies will still be disregarded for Irish VAT purposes. This is because no VAT group exists, which is regarded as a distinct person for VAT purposes. Intra-entity supplies will still be regarded as taking place within the one entity.

Recommended actions

Ogier's Tax team in Ireland advise businesses with cross-border operations, especially those who are members of VAT groups in Ireland or elsewhere in the EU, to review their internal arrangements and assess the potential impact on their VAT position.

Early consideration should be given to whether any restructuring might mitigate potential costs or whether opportunities for additional VAT recovery arise. Changes to existing VAT groups, potential exits and breaking up of VAT groups may be appropriate, noting such changes to Irish VAT groups will be at Revenue's discretion. 

How Ogier can help

If you have questions about the impact of these changes on business conducted in Ireland, contact Ogier in Ireland’s Tax team using the contact details below.

About Ogier

Ogier is a professional services firm with the knowledge and expertise to handle the most demanding and complex transactions and provide expert, efficient and cost-effective services to all our clients. We regularly win awards for the quality of our client service, our work and our people.

Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

Regulatory information can be found under Legal Notice