At present Irish VAT applies (generally at the 23% rate) where businesses established in Ireland provide electronically supplied services, telecommunications services and broadcasting services to non-business users located in the EU. With effect from 1 January 2015, VAT will arise on the provision of such services to non-business users at the rate of VAT applicable in the EU member state in which the non-business user is located (ordinarily resides). This will level the playing field and will remove any disadvantage from Irish location due to a relatively high VAT rate applying in Ireland. Businesses which have located sales operations in Luxembourg or other EU member states which have low VAT rates should now consider Irish location.

In order to prevent providers of these services from having to register for VAT in each EU member state where they have non-business user customers located, a “Mini One Stop Shop” will enable businesses to comply with their VAT obligations across the EU by registering in one EU member state. The EU Commission has published practical guidelines, ‘Guide to the mini One Stop Shop’, to help prepare businesses for these new VAT rules. Businesses should review these guidelines for the impending changes to the VAT rules.

The Irish VAT authorities have commenced an information campaign regarding the changes and the clear message is that the new regime will make Ireland more attractive as a business location.