Over-compression of scroll compressor in variable refrigerant flow (VRF) system is a common problem in improving system efficiency because it operates in part load conditions for most of the year. By introducing intermediate discharge valves (IDVs) to allow gas bypass from compression chamber to discharge side during compression process, the over-compression loss can be eliminated. In this study, the characteristics of compression process in IDV compressor are analysed and the effects of IDV port location and port size on compressor efficiency are discussed based on the validated high fidelity scroll compressor model. It is found that the IDVs could be able to adjust gas bypass process in different compression ratio conditions and maintain high efficiency over wider compression ratio range than that of non-IDV compressor. In addition, the VRF system model is integrated to verify the system performance improvement by IDV compressor. It is found that VRF system performance is significantly improved in cooling conditions with the IEER enhanced by 23.9 %, while limited improvement is obtained in heating conditions as the operating compression ratios are relatively higher.