Róisín Shortall (Dublin North West, Social Democrats)
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74. To ask the Minister for Finance the details of the Revenue Commissioners current programme reviewing various share issues from reserves of co-ops; the estimated number of farmers under review; the likely additional tax yield; the extent of look back involved, the details of the awareness campaign which he is undertaking; and if he will make a statement on the matter. [39273/16]

Michael Noonan (Limerick City, Fine Gael)
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I would first note that, since the establishment of the Revenue Commissioners in 1923, successive Governments and the Oireachtas have reaffirmed the principle of the independence of the Revenue Commissioners in their dealings with the tax affairs of any individual under tax and customs legislation. This independence is seen as critical to maintaining the integrity of the taxation system and forms a key pillar of Revenue's Governance framework.

I am advised by Revenue that their current compliance intervention activity is focused on patronage shares received by suppliers of milk as a consequence of and in proportion to the quantity of milk supplied and the extent to which those share allocations are at values other than market value. Where a cooperative does not receive the market price for the shares issued, then the profit accruing i.e. the difference between the market value of the shares issued and the price paid for these shares, forms part of the value received from the sale of milk and is accordingly assessable to income tax.

This programme of compliance activity by Revenue is in its initial phase and accordingly I am advised by Revenue that it is not possible to say at this stage the numbers of farmers that might be encompassed by this compliance programme or the additional tax yield that might arise. I am informed by Revenue that the initial phase involves a letter of enquiry to certain farmers as to whether the value of the shares received was included in the accounts for the years in question. Farmers who disclosed the share value received should not have any additional income tax liability in relation to the specific matter raised in these enquiries.  Where the share value received was not included in the accounts for the years in question, then the matter of an additional tax liability may arise.

I am assured by Revenue that there has been no change in policy in relation to this issue. It is well established, under general taxation principles that a person is taxable by reference to the value received for services rendered or product sold. Predominantly this value is generally received in the form of cash payments. However, where value is provided in the form of non-monetary benefits, such as shares, the same principle applies. Revenue has issued guidance very recently reiterating its view on this matter. In the context of the engagement between Revenue and individual taxpayers or their agents, Revenue will be happy to provide any further clarification of its position in this matter that may be necessary or helpful.