Beyond the rate: what businesses really want from Budget 2027

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Introduction

Rate cuts still make the headlines, but for most tax and finance leads, the real Budget question has changed. Can businesses plan, report and comply with confidence?

More than twenty years ago, when industry bodies approached Government ahead of the Budget, the conversation centred on the VAT rate. A one-point increase or decrease could define a sector’s year, and lobbying was loud and specific.

That hasn’t gone away. Rate cuts still make headlines, and Budget 2026 delivered a familiar set of measures, including the 9% rate for certain completed apartments, the reduction for restaurant, catering and hairdressing services, and the extension of the 9% rate on gas and electricity. But for most tax and finance leads, the rate is no longer the main issue. What matters now is whether businesses can plan, report and comply with confidence.

How the conversation changed

Two decades ago, VAT advocacy was largely about price. The long-running debate over the hospitality rate is the clearest example, with a single percentage point becoming a measure of an entire sector’s health. That still matters at the margins, but it now competes with a more pressing concern: predictability and the cost of staying compliant.

Business has changed. Operating models are more global, supply chains are more complex and transactions are increasingly digital. For many businesses, margins are now more exposed to compliance costs than to a one or two-point change in the headline rate. A rate change is felt once, when it takes effect. A compliance change is felt every day through the systems and people that manage it. For finance leaders, the real friction rarely sits with the rate on the invoice. It lies in raising, reporting and reconciling that invoice correctly.

The three things businesses want

Most requests from tax and finance leads fall into three areas:

Certainty. Businesses can plan around almost any rule if they understand it and know it will hold. They can’t plan around ambiguity and constant change. Clearly signposted policy and faster access to Revenue’s position on a particular treatment help businesses commit to investment. A shifting policy backdrop does the opposite, delaying decisions and pushing capital elsewhere.
Simplification. For most businesses, everyday friction in the system matters far more than the headline rate. Partial exemption remains one of the most resource-intensive areas of Irish VAT, particularly for regulated financial services, fintech and insurance groups. VAT grouping has become more complex, while the law still struggles to reflect operating models such as shared service centres and platforms. Removing that complexity is where the real value lies.
The cost of doing business. Where there is limited scope for rate changes, the practical levers are cash-flow support, timely refunds and proportionate administration. These measures rarely make headlines, but they give viable businesses breathing space and can do more for resilience than a rate change.

The global picture: why Ireland must keep pace

Across Europe, VAT is moving towards digital, real-time reporting. This is now law, not an ambition. The EU’s VAT in the Digital Age (ViDA) package will roll out in phases: One Stop Shop clarifications from January 2027, platform economy and single VAT registration changes from July 2028, and mandatory e-invoicing and digital reporting for cross-border B2B transactions from July 2030.

Ireland’s VAT Modernisation programme is sequenced to align with this timetable. Large corporates must introduce mandatory e-invoicing and real-time reporting for domestic B2B transactions from November 2028. This will extend to cross-border EU traders from November 2029, ahead of full EU alignment in July 2030. One detail matter for every Irish established business: from November 2028, all must be able to receive electronic invoices, regardless of when they’re required to send them. This creates a dual administration challenge for Irish companies with international suppliers that may not fall under the same obligation until 2030.

This is a significant operational change. Businesses need enough lead-in time to adapt their systems properly.

Competitiveness is what matters most. Businesses are mobile, and they compare jurisdictions based on ease of compliance, not rates alone. The EU’s case for ViDA includes reducing annual compliance costs by more than €4 billion and cutting fraud by up to €11 billion. A well-run, predictable Irish VAT system is a competitive advantage.

What good looks like from Budget 2027

A clear e-invoicing roadmap, with a realistic lead-in and a commitment not to go beyond EU minimum standards, would help businesses plan systems investment with confidence. More predictable Revenue response times could reduce disputes. Administration that reflects how businesses operate would also remove costs that add little value for anyone.

Compliance investment also needs to be viewed differently. It’s too often treated as a sunk cost. Getting transaction data right isn’t wasted effort.

Done well, it frees up capacity and allows the tax function to focus on more strategic areas of the business.

The bottom line

On Budget Day, the loudest conversation may still be about rates. But the discussion shaping how businesses operate and invest has moved on to certainty, systems and the cost of doing business. Budget 2027 lands on 6 October.

The businesses and jurisdictions that benefit most will be those that treat the move to digital, real-time VAT as an opportunity to build a more resilient finance function, rather than simply another deadline to meet.

About the authors

Drawing on extensive expertise in Irish and international indirect taxation, Emma and Janette advise organisations on VAT, cross-border tax matters, compliance, strategy, risk management, and evolving regulatory developments.