Willie Penrose (Longford-Westmeath, Labour)
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206. To ask the Minister for Finance his views on whether the flat rate addition which has been in use the poultry industry, whereby the cost of inputs are artificially inflated for the purpose of inflating flat rate addition and the normal VAT system in order to generate an excessive level of VAT recovery, might also be occurring in other sectors of the agricultural industry, such as the rearing of beef on a contractual basis for beef processors; if his attention has been drawn to such allegations; if an investigation or enquiry was carried out to determine if such was occurring; and if he will make a statement on the matter. [13382/17]

Michael Noonan (Limerick City, Fine Gael)
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The Deputy will be aware that the Revenue Commissioners brought to the attention of my Department that the interaction of the flat rate scheme for farmers and the normal VAT system was being exploited in a particular agricultural sector to achieve overcompensation for flat rate farmers on their VAT input costs.  To address the issue I introduced a legislative measure in Finance Act 2016, which enables 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. If it proves necessary to do so, I fully intend to make any order required to exclude any sector from the flat rate scheme. I expect Revenue to advise me later in the year if such action is necessary in any sectors.  

I am currently aware of claims concerning overcompensation of farmers for VAT input costs in one particular agricultural sector but am not aware of other such instances. I would encourage the Deputy to provide any information he has concerning such activities to Revenue.