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Update of July 2024
A new consultation took place on June 27th, encouraging the modernization of the VAT administration system. Revenue, the Irish Tax and Custom, is well aware of the need to stay close to business and stakeholders during the process and will try to be as clear as possible regarding the timeline, the delay provided as well as the administrative work it will require.
The tax administration also notes the upcoming ViDA Proposal, which will accelerate e-invoicing in the EU market.
Now that Revenue has acknowledged the priority of modernizing the Irish VAT system, we will keep a close eye on the future discussions that are are going to occur.
The Introduction of B2G e-invoicing
In April 2019, Ireland introduced B2G e-invoicing, requiring public bodies to accept eInvoices from suppliers who choose this method. While the law does not require suppliers to submit e-invoices to public bodies, it does make it easier for those who choose this method. A number of suppliers have already adopted e-invoicing when doing business with public authorities in Ireland.
Current Guidelines in Place
Ireland's e-invoicing efforts are aligned with the European Union's standard for e-invoicing.
Ireland has chosen the PEPPOL network as its network for e-invoices and e-procurement documents, following in the footsteps of many other European countries.
To further comply with EU standards, the Office of Government Procurement published a guide on how to send compliant eInvoices. The e-invoicing Guidelines are aimed at the four public sector bodies in Ireland that provide financial services to the health and education sectors, to local authorities and to central government departments.
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The Public Bodies are the following:
- Central Government Departments and the National Shared Services
- Office (NSSO), as well as Local Government. The Local Government Management Agency (LGMA)
- National Finance Division of the Republic of Ireland's Health Service Executive (HSE)
- Department of Education's ETBs, Education Shared Business
The guidelines identify common and different elements between the organizations.
The 2024 Consultation: The Future of Electronic Invoicing
For a better understanding of the current situation in Ireland, it is important to cover the statement issued by the Minister of Finance, Michael McGrath.
In October 2023, Minister McGrath issued a statement on the government's plan to modernize the VAT invoicing and reporting system in the 2024 budget.
Soon after, the Revenue launched a public consultation to gather views, concerns and opinions on how to digitize Irish VAT reporting and what the system should look like. The Revenue is currently considering the introduction of a VAT reporting requirement for domestic B2B and B2G trade. The consultation period ended in January 2024, so it's unclear when the Revenue will address the public.
There is no set timeframe for the implementation of these potential changes. As a result, we anticipate that there will be a reasonable period of notice prior to the implementation of any new rules.
The Irish Revenue is aware of the difficulties ahead. Most EU authorities have had to delay the implementation of similar rules for various reasons. As a result, it will likely take two to three years before we see any significant changes occur.
Contracting authorities and sectors in Ireland have varying levels of e-invoicing capability and approaches to receiving and processing eInvoices. Some still rely on manual and semi-automated processes, while others have advanced standards-based, automated and integrated systems.
The digital evolution represents a shift towards a more connected and efficient business landscape in Ireland. We look forward to seeing what the next steps will be. For more on the impact of the e-invoicing Regulation on other EU countries, please see our previous blogs.
