Éamon Ó Cuív (Galway West, Fianna Fail)
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To ask the Minister for Finance the estimate of extra tax that will be collected in a full year due to changes in taxes directed at the agricultural sector, including the VAT rebate for unregistered farmers; and if he will make a statement on the matter. [56613/12]

Michael Noonan (Limerick City, Fine Gael)
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Budget 2013 introduced four measures relating to the taxation of the farming sector, none of which incur extra tax on the agricultural sector. The Budget provided for the extension of the general rate of stock relief of 25% for a further three years to 2015; and for an extension of the young trained farmer (YTF) rate of stock relief of 100% for a further three years to 2015, subject to clearance with the European Commission under State aid rules. It is estimated that the extension of both of these farming stock reliefs (the 25% and the 100% rate) will cost the Exchequer €2m per annum.

In addition, Budget 2013 is extending the stock relief for farm partnerships to include other registered partnerships such as beef production partnerships, subject to EU State Aid approval. This increased rate of stock relief will be available until 31 December 2015 for partners in registered farm partnerships. It is estimated that this change will cost the Exchequer less than €1m. Furthermore, the Budget also provides capital gains tax relief will be available where the proceeds of a sale of farm land are reinvested in further farm land for farm restructuring purposes. In effect it would be a roll-over relief. The sale and purchase of the farm land must occur within 24 months of each other and the initial sale or purchase transaction must occur within the period commencing 1 January 2013 and ending on 31 December 2015. EU State-Aid approval of this measure is required. This measure is estimated to cost €3 million in 2013 and €5 million in a full year.

Finally, the farmers' VAT flat-rate addition for un-registered farmers is being reduced as part of the Budget from 5.2% to 4.8% with effect from 1 January 2013. This change will yield the Exchequer €18 million in 2013 and €21 million in a full year, however the overall cost to the Exchequer of the scheme will be €249m in a full year. The flat-rate scheme, which is governed by EU VAT law, compensates unregistered farmers for VAT incurred on their business inputs. The scheme is reviewed annually by reference to macro-economic data, for the preceding three years, on agricultural production and agricultural inputs and the deductible VAT content of such inputs. The reduction in the flat-rate addition to 4.8% for 2013 is a result of calculations on the basis of macro economic data received from the Central Statistics Office for 2010, 2011 and 2012. However, the new 4.8% rate for 2013 continues to achieve full compensation for farmers under the scheme.