diff --git a/changelogs/fragments/11555-incus-domain-name.yml b/changelogs/fragments/11555-incus-domain-name.yml
new file mode 100644
index 0000000000..b7549fb41e
--- /dev/null
+++ b/changelogs/fragments/11555-incus-domain-name.yml
@@ -0,0 +1,2 @@
+minor_changes:
+  - incus inventory plugin - add support for constructing project-independent FQDNs (https://github.com/ansible-collections/community.general/pull/11555).
diff --git a/plugins/inventory/incus.py b/plugins/inventory/incus.py
index a3725ac45e..b537c1909c 100644
--- a/plugins/inventory/incus.py
+++ b/plugins/inventory/incus.py
@@ -34,7 +34,8 @@ options:
     default: []
   host_domain:
     description:
-      - Domain to append to the host FQDN.
+      - Domain to append to the host.
+      - This is also used when O(host_fqdn) is not set since community.general 12.5.0.
     type: string
   host_fqdn:
     description:
@@ -170,9 +171,9 @@ class InventoryModule(BaseInventoryPlugin, Constructable):
                     if self.get_option("host_fqdn"):
                         host_name = f"{host_name}.{project}.{remote_name}"
 
-                        domain = self.get_option("host_domain")
-                        if domain:
-                            host_name = f"{host_name}.{domain}"
+                    domain = self.get_option("host_domain")
+                    if domain:
+                        host_name = f"{host_name}.{domain}"
 
                     # Add some extra variables.
                     host_vars = {}
diff --git a/tests/unit/plugins/inventory/test_incus.py b/tests/unit/plugins/inventory/test_incus.py
index 7d6eaa140f..1d922bf18f 100644
--- a/tests/unit/plugins/inventory/test_incus.py
+++ b/tests/unit/plugins/inventory/test_incus.py
@@ -46,23 +46,11 @@ def test_verify_file_bad_config(inventory):
     assert inventory.verify_file("foobar.wrongcloud.yml") is False
 
 
-def get_option(option):
-    if option == "default_groups":
-        return True
+def _build_get_option(options):
+    def _get_option(option):
+        return options.get(option, False)
 
-    if option == "remotes":
-        return ["r1", "r2", "r3:proj1", "r3:proj2"]
-
-    if option == "filters":
-        return ["status=running"]
-
-    if option == "host_fqdn":
-        return True
-
-    if option == "host_domain":
-        return "example.net"
-
-    return False
+    return _get_option
 
 
 def _make_host(name):
@@ -110,6 +98,15 @@ def run_incus(*args):
 
 
 def test_build_inventory(inventory, mocker):
+    get_option = _build_get_option(
+        {
+            "default_groups": True,
+            "remotes": ["r1", "r2", "r3:proj1", "r3:proj2"],
+            "filters": ["status=running"],
+            "host_fqdn": True,
+            "host_domain": "example.net",
+        },
+    )
     inventory.get_option = mocker.MagicMock(side_effect=get_option)
     inventory._run_incus = mocker.MagicMock(side_effect=run_incus)
     inventory.populate()
@@ -141,3 +138,46 @@ def test_build_inventory(inventory, mocker):
     assert len(inventory.inventory.groups["incus_r3"].child_groups) == 2
     assert len(inventory.inventory.groups["incus_r3_proj1"].hosts) == 1
     assert len(inventory.inventory.groups["incus_r3_proj2"].hosts) == 2
+
+
+def test_build_inventory_fqdn_from_host_domain(inventory, mocker):
+    get_option = _build_get_option(
+        {
+            "default_groups": True,
+            "remotes": ["r1", "r2", "r3:proj1", "r3:proj2"],
+            "filters": ["status=running"],
+            "host_fqdn": False,
+            "host_domain": "example.net",
+        },
+    )
+    inventory.get_option = mocker.MagicMock(side_effect=get_option)
+    inventory._run_incus = mocker.MagicMock(side_effect=run_incus)
+    inventory.populate()
+
+    c1 = inventory.inventory.get_host("c1.example.net")
+    assert c1
+    assert "ansible_incus_status" in c1.get_vars()
+
+    c2 = inventory.inventory.get_host("c2.example.net")
+    assert c2
+    assert "ansible_incus_status" in c2.get_vars()
+
+    c3 = inventory.inventory.get_host("c3.example.net")
+    assert c3
+    assert "ansible_incus_status" in c3.get_vars()
+
+    c4 = inventory.inventory.get_host("c4.example.net")
+    assert c4
+    assert "ansible_incus_status" in c4.get_vars()
+
+    c5 = inventory.inventory.get_host("c5.example.net")
+    assert c5
+    assert "ansible_incus_status" in c5.get_vars()
+
+    assert len(inventory.inventory.groups["all"].hosts) == 5
+    assert len(inventory.inventory.groups["incus"].child_groups) == 3
+    assert len(inventory.inventory.groups["incus_r1"].child_groups) == 1
+    assert len(inventory.inventory.groups["incus_r2"].child_groups) == 1
+    assert len(inventory.inventory.groups["incus_r3"].child_groups) == 2
+    assert len(inventory.inventory.groups["incus_r3_proj1"].hosts) == 1
+    assert len(inventory.inventory.groups["incus_r3_proj2"].hosts) == 2