From Directive to Domestic Roll-Out: Navigating ViDA and Ireland’s Budget 2026 VAT Modernisation

Understanding ViDA’s three-pillar agenda

The ViDA package centres on three core pillars:

1. E-invoicing and digital reporting – Member States may mandate domestic structured invoice issuance and transmission from April 2025. For intra-EU B2B e-invoicing becomes mandatory from 1 July 2030.
2. Platforms, online services and digital-economy supplies – The reforms introduce enhanced rules for platforms facilitating short-term accommodation or passenger transport, including “deemed supplier” status from 1 Jan 2030 (or optionally from 1 July 2028).
3. Single VAT registration / expanded OSS – The OSS regime is broadened significantly. From 1 Jan 2027 the OSS will cover B2C supplies of electricity, gas and heat. From 1 July 2028 all B2C goods and services and intra-EU stock transfers will fall under the OSS.

These reforms shift VAT from the historically periodic and decentralised model towards a continuous, digital, harmonised infrastructure — designed to bolster single-market efficiency, combat VAT fraud and simplify cross-border trade.

Ireland’s domestic roadmap: Budget 2026 and beyond

While the EU framework provides overarching deadlines, the domestic application in Ireland is now gaining specificity. Budget 2026 outlines both rate-changes and implementation commitments. Notably:

• The reduced 9 % VAT rate on electricity and gas has been extended until 31 December 2030.
• The VAT rate for restaurant, café, take-away catering and hairdressing services will drop from 13.5 % to 9 % from 1 July 2026.
• A significant development for VAT modernization: the Revenue Commissioners will begin a phased rollout of mandatory domestic B2B e-invoicing and real-time reporting. Large corporates will be in scope from November 2028 and the general VAT-registered business population begins by November 2029, ahead of the EU cross-border deadline of July 2030.

In short, Ireland is accelerating its VAT infrastructure transformation in parallel with—or ahead of—the EU’s timeline. The phasing offers businesses a runway to prepare, but also a clear mandate to act.

Sectoral implications and business-impact

Invoicing and reporting systems

Businesses will need to move from issuing PDF or scanned invoices to structured e-invoices (EN 16931-compliant) that include specific data-fields and are capable of being digitally transmitted and reported in real-time. For intra-EU trade, both supplier and buyer may need to report within five days.

This means significant IT upgrades, invoice-flow redesign and stronger integration between invoicing, ERP and tax-reporting systems.

Cross-border trade and OSS

The expanded OSS simplifies VAT registration for cross-border sellers. When operational, a business may register in one Member State (via OSS) rather than multiple jurisdictions. For goods movements and stock transfers post-1 July 2028, the need for separate dispatch/arrival state registration may vanish. Irish businesses trading across the EU should map their supply-chain, assess whether OSS registration offers relief, and anticipate new stock-transfer reporting regimes.

Platform-economy and services

For platforms facilitating short-term accommodation or passenger transport, from 2028–30 the “deemed supplier” rules will embed significant obligations — such as VAT collection and remittance — especially where suppliers are not VAT-registered. Businesses in the sharing economy should engage early.

Rate-changes and transitional relief

Although ViDA is focused on reporting architecture rather than tax rates, Ireland’s Budget-led rate changes (particularly the 9 % rate for hospitality and hairdressing) create compliance spikes mid-2026. Accounting systems must be ready to apply the correct rate from the change date to avoid errors.

Recommendations- preparing for the digital VAT-era

• Conduct a readiness assessment of your invoicing, ERP and tax-reporting architecture: can you issue structured e-invoices, transmit/receive them, report in real-time?
• Map your supply-chain exposure: intra-EU goods, services, platform-economy involvement, stock transfers — determine where OSS, reverse-charge or deemed supplier rules may apply.
• Update systems and controls ahead of domestic rollout: identify the business units, geographies and processes impacted; develop a roadmap with IT & tax teams.
• Communicate change internally: tax functions, finance ops, IT, procurement, sales teams must know how invoicing, reporting and cross-border trade will change.
• Engage with advisors/Revenue guidance: as the Revenue roadmap is released, stay engaged with indirect tax advisors, attend guidance webinars and build compliance paths.
   

Final thought

The ViDA reforms represent a watershed moment in the evolution of VAT across the EU. For Irish businesses, the convergence of the EU-wide timeline and the accelerated domestic push following Budget 2026 means that VAT compliance is no longer a back-office afterthought — it is a strategic, digital-first business process. Businesses that act now to restructure their invoicing, reporting and cross-border frameworks will not only stay compliant but gain competitive advantage. At the same time, those who delay risk being caught off-guard by the changed compliance landscape.