Charlie McConalogue (Donegal, Fianna Fail)
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171. To ask the Minister for Finance his plans regarding the commencement of the section 46 flat rate addition amendment (details supplied); and if he will make a statement on the matter. [13276/17]

Michael Noonan (Limerick City, Fine Gael)
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Section 86A of the VAT Consolidation Act 2010 (as inserted by Section 47 of the Finance Act 2016) is an enabling provision that allows me to exclude by Ministerial Order any specified agricultural sector where the business structures or models employed result in a systematic excess of flat-rate addition payments over input costs borne by flat-rate farmers within that sector. I can make an order for exclusion where The Revenue Commission has carried out a review on a sector and I am satisfied that, because of the business structures, contractual arrangements or models in place in a particular sector, the application of the flat-rate addition within that sector has resulted in, and would otherwise continue to result in, a systematic excess of flat-rate addition payments over VAT on inputs incurred by flat-rate farmers in that sector. If it proves necessary to do so, I will make any orders required, but as indicated at Report Stage in the Dail, I will give any sectors affected adequate time to make the necessary changes to their business models and I do not envisage making a Ministerial Order to exclude any particular sector from the flat-rate scheme until the latter part of 2017.

I am aware of evidence of business structures and contractual arrangements in the poultry sector that would be likely to result in an excess of flat rate addition payments to farmers over the VAT borne on their input costs, and I am advised by Revenue that they are in the process of meeting relevant parties in that sector to establish if they plan to unwind any structures and arrangements that are designed or likely to give rise to overcompensation of farmers for the VAT borne on their input costs. If Revenue are not satisfied that any such structures and arrangements will be unwound within an acceptable timeframe they will complete a review of the sector as provided for in the legislation. Upon reciept of such a review, if I am satisfied that a systemic excess has taken place in their sector, I will have no hesitation in making an order to exclude the sector from the flat-rate scheme.