Ireland Revenue Introduces Variable Direct Debit (VDD) for VAT Payments

In August 2025, Ireland’s Revenue introduced a Variable Direct Debit (VDD) system for VAT payments on ROS. This new system replaces the current Fixed Direct Debit (FDD) option and allows Revenue to automatically collect the actual VAT balance due on the correct date.

Revenue will deduct the VAT amount on or around the third last working day of each month, and businesses cannot choose a different collection date.

What the New Variable Direct Debit System Means

Under VDD, taxpayers give Revenue permission to debit their bank account for the outstanding VAT balance on the due date. This modernised approach aligns with standard industry practice and brings several advantages:

• The correct VAT amount is collected automatically
• No risk of interest due to underpayment
• More accurate and up-to-date visibility of VAT liabilities
• Fewer payment events (maximum of six per year)
• Immediate access to VAT credits once they arise

Revenue is rolling out the change gradually:

• April 2025: Launch of awareness campaign
• 2025–2026: Information letters sent to affected VAT-registered businesses
• Until April 2026: Transition notices issued as each annual VAT period closes.

Learn more.

Filing Frequency Under the New System

Under this payment option, VAT filing is moving from annual returns to bi-monthly periods. However, reduced filing frequencies remain available for small businesses:

• Every four months: annual VAT liability between EUR 3,001 and EUR 14,400
• Every six months: annual VAT liability of EUR 3,000 or less.

Eligible businesses can apply directly to Revenue to amend their filing schedule.

How Marosa Can Support You with VAT Compliance in Ireland

Marosa provides guidance on payment automation, filing frequency updates, and legislative changes. With Vatify, we also ensure accurate VAT reporting, detect discrepancies, and manage deadlines so that clients stay compliant with minimal administrative effort.

Learn more about Irish VAT by consulting our dedicate VAT manual.