- Irish Revenue has updated its VAT guidance on debt factoring and invoice discounting to align with the CJEU’s Kosmiro decision, effective 20 May 2026.
- Advance funding in these arrangements is no longer treated as a VAT-exempt credit supply; the whole arrangement is now a single supply of debt collection services.
- Financing or funding elements within factoring/invoice discounting are subject to VAT at the standard rate.
- The financial services exemption is now limited to separate, standalone credit supplies, reducing reliance on recourse/non-recourse distinctions.
- This may affect existing receivables financing structures, including pricing, contracts, and VAT recovery positions.
Source: dlapiper.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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