Revenue has published updated guidance in its Tax and Duty Manual (TDM) in light of the CJEU decisions in Skandia and Danske Bank. These changes represent a shift in interpretation regarding the territorial scope of Irish VAT groups.

Key changes

• From 1 January 2027, Irish VAT groups will be limited to establishments located in Ireland. Non-Irish head offices or branches can no longer be included in an Irish VAT group.
• Irish establishments of entities that are members of VAT groups in other EU Member States will be treated as separate taxable persons from their EU VAT grouped establishments.
• These rules apply immediately to any new VAT groups formed from the date of publication of the guidance.

Implications

• Supplies between Irish VAT groups and non-Irish establishments are no longer disregarded under VAT grouping provisions and will now fall within the scope of Irish VAT, if not otherwise exempt.

Next steps

• Existing VAT groups have until 31 December 2026 to transition to the new rules.
• An internal Revenue Working Group has also been established to coordinate queries from taxpayers.