Heather Humphreys (Cavan-Monaghan, Fine Gael)
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186. To ask the Minister for Finance with regard to farmers who let 100% of their farmland and their single farm payment entitlements and who now have to sell those entitlements to active farmers before 15 May 2014; if these farmers will be subject to VAT on the sale of entitlements worth over €37,500 or if they will be exempt from VAT; and if he will make a statement on the matter. [21125/14]

Michael Noonan (Limerick City, Fine Gael)
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Where a person, such as that described by the Deputy, sells their payment entitlement without land then VAT at the standard rate of 23% applies if the sale proceeds exceed the relevant threshold for registration (currently €37,500 per 12 month period).  There is no exemption in Irish or EU VAT legislation for such sales.  However, where a flat-rate farmer exceeds the threshold solely by virtue of selling a payment entitlement, that person is permitted to register for VAT in respect of that single transaction only, and can remain a flat-rate farmer for other transactions.

Where the value of entitlements being sold by a farmer is less than the VAT registration threshold of €37,500, no VAT will apply to the sale.  In addition, if the land is sold with the entitlements for farming purposes, no VAT would be due as it would be considered a transfer of a business.