EY Cork: Transformation and automation key themes of indirect tax landscape in 2025

At the recent EY Cork event — ‘New Year New Outlook VAT & Indirect Tax Update’ — held at their office at City Quarter, Lapps Quay, transformation and automation emerged as key themes, alongside the evolving landscape of indirect tax expected over the next few years.

EY’s Cork Indirect Tax Partner James Fox, his Partner colleagues, Deirdre Hogan, Aideen Farrell, Colin Doolin and Ray Smyth, EY Director, presented an informative session on key VAT and customs trends to watch out for in the current year and looked ahead to the landscape until 2030 with the upcoming VAT in the Digital Age (“ViDA”) changes.

“The event was an opportunity to discuss relevant themes of transformation and automation, as well as the significant changes that are happening across the indirect tax landscape,” explained Indirect Tax Partner James Fox. The topics covered included the current geopolitical arena, increased tariffs and their impact on supply chains, as well as increased Revenue audits and activity.

“We are witnessing a pace of activity that we haven’t seen before. We took a 2025 to 2030 view, looking forward to the digital tax changes that are coming. ViDA, which stands for ‘VAT in the Digital Age,’ is the new e-invoicing and digital reporting changes coming in across the European Union from 2030. ViDA will revolutionise how companies manage their ongoing invoicing and compliance reporting journeys by requiring mandatory e-invoicing for cross-border European Union transactions as well as introducing digital VAT reporting.”

James also notes that such changes are going to require a significant “buy-in” from companies across all service lines and departments to design a strategy to meet their relevant e-invoicing obligations. “Your source of truth is going to be your data — how strong is your data in terms of the quality and any cleansing that you need to do,” James advises. To that end, the number one ask for companies is to devise an internal strategy outlining what steps they should be taking to get ready for their ViDA journeys over the next five years which will impact all parts of the business.

Preparing a holistic strategy rather than a ‘sticking plaster’ approach

The event at the EY Cork offices also covered topical updates across case law, increased Revenue audit activity and the alignment of indirect tax with direct taxes, such as transfer pricing, as well as global trade and tariffs. “We also focused on the US and the ever-changing agenda of global trade and tariffs, with companies needing to review their supply chain to model out potential costs of increased tariffs and consideration of alternative trade routes.”

While the 2030 deadline looms for companies and individuals, the reality is that these changes need to be addressed now, with some countries in the EU already introducing their own e-invoicing and digital reporting regimes as well as other ViDA changes around Single VAT registration and changes impacting the platform economy from 2028.

“Some people may think that 2030 is five years out and a long way off, but some countries have already implemented e-invoicing and digital reporting this year and others will begin doing so before it becomes mandatory in 2030. It is crucial for companies to take a holistic view of their supply chain, their global footprint and how their data quality holds up against ever-increasing compliance requirements. It is very much about developing a holistic strategy rather than a ‘sticking plaster’ approach that addresses a problem in one country alone.”

While tax authorities broadly expect that multinationals will have the resources and the budgets and wherewithal to adapt, the SME sector will face significant challenges in joining this transition. “Every SME company that trades within the EU will also need to prepare for this transformation, with potential for domestic e-invoicing over time,” James stresses. “Companies are likely in the middle of three to five year budget plans and may not know how much it is going to cost or how long it will take to implement, so early engagement will be key.”

Irish Revenue has played a full role across all EU discussions to date and has been very forthcoming about how they will guide companies on this journey. “Ultimately, the goal is to reduce the VAT gap and underpayment, making it easier for tax authorities to track intra-EU transactions.”

James adds that Irish Revenue has very much played its part and is keen to align with the EU transition. “Events like ours give people a chance to network and discuss major changes like these. Indeed, many attendees said that it was beneficial to attend and engage with peers as they look ahead to a period of significant transition in the Indirect Tax landscape over the coming years.

To learn more, visit www.ey.com/en_ie