Revenue has updated its guide on protecting businesses from VAT fraud, emphasizing due diligence and risk indicators. Key considerations include transaction characteristics, supplier legitimacy, and payment conditions. Critical questions help assess transaction genuineness, with compliance pressure increasing amid stricter EU regulations against VAT fraud.
Ireland Revenue Updates: Main VAT Fraud Risk Indicators to Watch
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Ireland
Author: Ema Stamenković
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Content accuracy validation date:
06.04.2026
Content accuracy validation time:
08:24h
The Irish Tax and Customs Service (Revenue) has updated its guide on how taxable persons can protect their businesses from VAT fraud. In light of the EU’s ongoing concerns about the impact of VAT fraud on European and national economies, the guide focuses on two key areas: due diligence and risk indicators. Revenue has notably updated the risk indicators section.
Risk Indicators of VAT Fraud
Due diligence is essential when entering transactions with new or unknown parties. Many risk indicators can help taxable persons detect VAT fraud early or during the business cycle.
A key indicator is when a transaction involves practices that differ from normal industry expectations, which may signal increased risk or irregularities.
Revenue highlights three important considerations for assessing transaction characteristics:
- The nature of the goods or services supplied,
- Payment arrangements and conditions,
- And details of the movement of goods.
Revenue also lists several indicators that may alert taxable persons to the risk that VAT may go unpaid.
To properly understand the transaction and business partner, taxable persons should examine:
- The legitimacy of suppliers,
- The commercial viability of the transaction,
- And the viability of the goods or services as described by the supplier.
Revenue provides a non-exhaustive list of critical questions to help determine whether a transaction is genuine, economically rational, and free of VAT fraud or non-compliance indicators.
Conclusion
As tax authorities across the EU tighten measures against VAT fraud and evasion, compliant taxable persons face increasing pressure to ensure they are not involved in such activities. Even unintentional participation can result in consequences, including denial of the right to deduct input VAT, loss of zero-rating on intra-Community supplies, or harsher penalties in extreme cases.
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