Revenue names the businesses that will lead the country’s shift to digital VAT reporting, while advisers say SMEs should use the long runway to prepare.
Revenue has confirmed which businesses will fall into the first phase of Ireland’s VAT Modernisation programme, marking the most concrete step yet toward the national rollout of mandatory e‑invoicing.
The announcement identifies large corporates as the first group that will be required to issue structured electronic invoices for domestic business to business transactions from 1 November 2028.
“Small taxpayers might be breathing a sigh of relief today. Revenue’s confirmation that Phase One of VAT Modernisation will apply initially only to large corporates brings welcome clarity on who will be first in scope”
The tax authority said that any VAT registered business managed by its Large Corporates Division, and that is established or has a fixed establishment in Ireland, will fall into Phase One. Those businesses will need to issue e‑invoices in a structured format such as XML that meets European Standard EN16931. Unstructured documents, including PDFs or scanned invoices, will not qualify.
All Irish businesses, regardless of size, will need to be able to receive structured e‑invoices from the same date.
EU VAT in the Digital Age reforms
Revenue said the early phase is designed to give the market time to adapt ahead of the wider EU VAT in the Digital Age reforms, which will apply to cross border EU transactions from July 2030. Letters confirming inclusion in Phase One will be issued in the coming weeks.
The authority added that it will continue engagement with industry groups, software providers and other stakeholders and stressed that it recognises the scale of the transition. According to Revenue, “implementing e‑invoicing represents a significant change” and the organisation intends to provide “comprehensive support” throughout the shift.
Emma Broderick, head of Indirect Tax at Grant Thornton Ireland, said the announcement offers long awaited certainty for the largest taxpayers.
“Small taxpayers might be breathing a sigh of relief today,” she said. “Revenue’s confirmation that Phase One of VAT Modernisation will apply initially only to large corporates brings welcome clarity on who will be first in scope.”
She noted that affected companies can now expect direct communication from Revenue. However, she also highlighted the lack of detail still surrounding the practicalities.
“The detailed domestic B2B e‑invoicing requirements have yet to be published and without that level of specificity it remains challenging for businesses to fully assess the operational, systems and compliance impacts,” she said.
Broderick added that large corporates should treat Revenue’s announcement as a signal to begin preparations. System changes and process redesign are expected to carry long lead times once the technical rules are finalised. “Early engagement will be key to a smooth transition,” she said.
Revenue is encouraging businesses in scope to begin reviewing systems for e‑invoicing capability, work with software providers on technical readiness and assess internal processes that will need to be updated.
For SMEs not included in the first phase, the announcement marks the start of a multi‑year shift that will eventually touch the entire business landscape. While smaller companies will not be required to issue structured e‑invoices until later phases of ViDA, the 2028 deadline for receiving them still stands, meaning systems for incoming invoices will need to be compatible.
Enquiries regarding VAT Modernisation and ViDA can be directed to Revenue at vatmodernisation@revenue.ie.
Key Recommendations for SMEs
- Assess your current invoicing and finance systems
- Check whether your accounting or ERP platform already supports structured e‑invoicing formats such as XML aligned to EN16931.
- Identify gaps in your ability to receive, store and process structured e‑invoices.
- Confirm upgrade pathways and timelines with providers.
- Engage with your software vendors early
- Ask vendors for their roadmap for ViDA and Irish VAT Modernisation.
- Ensure any planned system upgrades include the ability to receive structured e‑invoices by the 2028 deadline.
- Request clarity on costs, testing periods and training.
- Start mapping your invoicing and accounts payable workflows
- Understand how incoming e‑invoices will feed into your AP process.
- Review approval chains, three‑way matching, data capture steps and integration across finance tools.
- Identify opportunities to automate tasks once e‑invoices replace PDFs.
- Strengthen your digital record‑keeping
- Ensure your document management and bookkeeping processes can store structured invoices securely and consistently.
- Begin standardising supplier data and invoice categorisation to support smoother automation later.
- Ask suppliers about their plans
- Large corporates will be sending structured e‑invoices from late 2028.
- SMEs should begin identifying key suppliers and asking:
- When will you transition to structured e‑invoicing?
- Will there be testing or onboarding required?
- Which formats will you use?
- Prioritise cybersecurity and data protection
Structured e‑invoicing involves machine readable financial data, which increases the need for:
- secure file transfer processes
- strong access controls
- updated cyber policies and staff training
- Prepare for cultural and organisational change
- Finance teams, purchasing departments and business owners will all need to understand how e‑invoicing works.
- Start early with light‑touch awareness sessions and process documentation.
- Track further updates from Revenue
- The detailed Irish B2B domestic e‑invoicing requirements have not yet been published.
- SMEs should monitor Revenue updates so they can plan ahead without surprises.
- Subscribe to updates from advisors, sector bodies or software partners.
- Build this into medium‑term digital strategy
- ViDA and VAT Modernisation align with broader EU‑wide digitalisation.
- SMEs investing early in digital finance systems will gain:
- faster payment cycles
- reduced manual processing
- fewer reconciliation errors
- better cash‑flow visibility
- Treat the next two years as an opportunity, not a burden
Even though SMEs are not in Phase One, the ability to receive structured e‑invoices will become a basic requirement. Early movers will experience far less disruption and may even reduce operating costs.
-
Bank of Ireland is welcoming new customers every day – funding investments, working capital and expansions across multiple sectors. To learn more, click here
-
For support in challenging times, click here
-
Listen to the ThinkBusiness Podcast for business insights and inspiration. All episodes are here. You can also listen to the Podcast on:
-
Spotify
-
SoundCloud
-
Apple
