Michael Noonan (Limerick City, Fine Gael)
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The figures stated in my reply to Questions 157 to 160 on 18 November 2014 relate to profits earned from the provision of stallion stud services carried out in the course of a trade during the years 2008 to 2012 inclusive.  I am advised by the Revenue Commissioners that these amounts may not include gains from the sale of stallions, nor does it include profits earned from the provision of stallion stud services that are owned by syndicates as these are not regarded as having been earned in the course of a trade.  It is not possible to state the amount of any profits associated with these activities as they are not separately captured on tax returns.

Regarding the apparent mis-match between the level of tax paid and the fact that thoroughbred breeding is a significant industry in the State, there are a number of factors to be considered that make it difficult to extrapolate expected tax payments from the reported level of activity in the same way as might be feasible for other more mainstream economic activities.

Firstly as I pointed out in my previous reply, stallion related profits or gains are aggregated by taxpayers with all other incomes for the purposes of Income and Corporation Tax calculations and taxpayers can avail of a variety of different deductions and reliefs, which affect the final tax liability. The profit figures declared may also be reduced by capital allowances or losses to which that taxpayer may be entitled.  Secondly, previous independent reviews of the stallion sector confirmed that the sector is capital intensive and requires significant on-going investment with profits made normally re-invested to produce new stock.  It is also a fact that a large number of stallions are not successful at stud and it is likely that the uncertainty of the breeding business impacts the bottom-line profits made.  Thirdly, the short nomination life and the uncertainty of success in the industry are recognised by the fact that an annual 25% of the initial value of each stallion can be deducted for tax purposes.

I am informed that based on the latest data produced by Horse Racing Ireland in their "Factbook 2013" there were 206 stallions at stud in 2013.

The Deputy will be aware that significant economic activity in the thoroughbred industry is also generated from broodmare breeding operations.  By way of comparison, based on the latest data produced by Horse Racing Ireland in "Factbook 2013", there were 12,643 mares at stud in 2013.

Profits associated with this aspect of the thoroughbred industry were not included in the figures provided in my previous reply as the questions related to stallions.  I am advised by the Revenue Commissioners that profit figures in connection with broodmares cannot be provided as they are not separately identified on tax returns nor were profits from this activity previously exempt from tax.

Consequently, given the range of variables associated with the stallions industry and the fact that the profits from a number of activities within the thoroughbred breeding sector are not separately identifiable, it is not appropriate for me to comment on the quantum of tax payments from the sector.