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If you have any queries or would like to discuss the practical implications of these changes, our team is here to help.
You can contact us directly or read more of our Budget 2027 coverage.
While there were no major VAT updates announced in Budget 2027 for general business, there were a few welcome targeted VAT measures for the agri-food and charity sectors.
VAT Compensation Scheme for charities
The total annual cap for the Charities VAT Compensation Scheme is being increased from €10 million to €15 million for 2027.
The VAT Compensation Scheme aims to reduce the VAT burden on charities by partially compensating eligible charities for VAT incurred on their day-to-day expenditure where that VAT cannot otherwise be recovered.
VAT on livestock respiratory vaccines reduced to 9%
The VAT rate for non-oral respiratory vaccines for livestock will be reduced from 23% to 9%.
Oral medicines (including vaccines) currently attract the zero-rate of VAT in Ireland and the new measures announced in Budget 2027 will now reduce the VAT rate for non-oral respiratory vaccines for livestock from 23% to 9%. The measure should lower the VAT-inclusive cost of qualifying vaccines and support preventative animal-health measures. The effective date of the change should be announced in the Finance (No 2) Bill 2026.
Special Flat Rate Scheme for Farmers
The Special Flat Rate Scheme for Farmers will increase from 4.5% to 4.8% with effect from 1 January 2027.
The Special Flat Rate Scheme for Farmers compensates eligible farmers who are not VAT registered for VAT incurred on their purchases.
The rate is revised every Budget and is derived from a calculated average of VAT costs based on macroeconomic data collected from the CSO and Revenue over the preceding three years.
VAT Modernisation and E-Invoicing
In October 2025, Revenue announced that it would begin a phased roll-out of domestic E-Invoicing for business to business (B2B) transactions from November 2028. We expect further communication in respect of Ireland’s approach to VAT modernisation and the roll out of E-Invoicing in Finance (No 2) Bill 2026.