Paschal Donohoe (Dublin Central, Fine Gael)

This section amends section 6(1)(a) of the Value-Added Tax Consolidation Act, which sets out the obligation for farmers, as defined for VAT purposes, who supply certain agricultural goods and services, to register and account for VAT. Following the proposed amendment, these farmers will be assessed for VAT in line with the recent amendments introduced for other taxable persons as part of the transposition of Council Directive (EU) 2020/285, otherwise referred to as the SME directive. From 1 January, turnover on certain agricultural goods and services, as provided for in section 6(1)(a), will be assessed based on actual turnover in the current and previous calendar years as distinct from the likely turnover over the next 12 months. In addition, from 1 January, turnover to be assessed will also include turnover from the supply of agricultural goods and services excluded from the flat-rate addition scheme on foot of an order issued under section 86A. An amendment is also proposed to section 6(2)(c) to include goods and services covered by an order issued under section 86A in the anti-fragmentation rules applied to farmers.

Amendments are also proposed to be made to sections 4(1)(b) and 17(2) of the VAT legislation, which will align how a farmer's horse training activities turnover is assessed for VAT registration in domestic VAT law with the aforementioned SME directive.

An amendment is proposed in Schedule 3, paragraph 12(1A), to similarly align how the VAT services threshold is assessed on turnover derived by public bodies from the provision of facilities for sporting and physical education activities, with the provisions of the SME directive.

These proposed amendments will ensure that Ireland complies with its mandatory legal obligation to transpose SME provisions from the EU VAT directive. It also brings goods and services excluded from the flat-rate addition on foot of an order issued under section 86A into the normal VAT registration provisions.