Éamon Ó Cuív (Galway West, Fianna Fail)
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Question 67: To ask the Minister for Finance his plans to introduce a VAT refund scheme for all micro-energy installations used on non-VAT registered farms to encourage the growth of this sector; and if he will make a statement on the matter. [15973/11]

Michael Noonan (Limerick City, Fine Gael)
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Farmers who are registered for VAT account for VAT in respect of all their taxable activities, whether those activities consist solely of farming or both farming and other activities such as the generation of electricity for provision to the national grid. In turn they are entitled to claim input credit for VAT charged on the installation of renewable energy microgeneration equipment for use in their taxable activities.

Farmers who are not registered for VAT are not in the normal course entitled to credit for, or repayment of, VAT incurred by them on their business inputs. The Value-Added Tax (Refund of Tax) (No 25) Order, 1993 provides for refunds to unregistered farmers for tax borne on the

"construction, extension, alteration or reconstruction of any building or structure which is designed for use solely or mainly for the purposes of a farming business". However, while the installation of micro energy equipment may be the construction of a structure, such a structure is not

"designed for use solely or mainly for the purposes of a farming business". It is designed rather to generate electricity for wherever required. Consequently, the installation of alternative energy generators does not come within the scope of the VAT refund order.