Updated VAT Guidance on Debt Factoring and Invoice Discounting

• The VAT Tax and Duty Manual on debt factoring and invoice discounting was updated in May 2026, with changes to paragraph 5 and Appendix 1 to reflect the CJEU decision in Case C-232/24 (Kosmiro).
• The updated guidance takes effect from the date of publication.
• Debt factoring is described as a financier purchasing debts, notifying debtors, collecting the debts, and providing advance funding/credit to the client.
• Invoice discounting is described as assigning debts to a financier while the client collects the debts as the financier’s agent, either disclosed or confidential.
• The document also explains “with recourse” and “without recourse” arrangements, depending on who bears the risk of debtor default.

Source: revenue.ie

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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