Written answers

Tuesday, 20 June 2017

Photo of Mattie McGrathMattie McGrath (Tipperary, Independent)
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217. To ask the Minister for Finance if the Revenue Commissioners were notified of a feed price increase by a processor in the poultry sector prior to that processor proceeding with the increase; and if he will make a statement on the matter. [26836/17]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that traders are not required to notify them of their prices or of any changes to their prices and that generally there is no legal basis for price controls in Ireland.  They have also informed me that they are well aware of claims that the interaction of the flat rate scheme for farmers and the normal VAT system can under certain circumstances be exploited to generate a systematic excess of flat rate payments to unregistered farmers over the VAT borne by them on their input costs.

I made provision in Finance Act 2016 for the exclusion by Ministerial Order of a sector from the flat rate scheme where the use of certain business structures and/or contractual arrangements within a particular sector result in a systematic excess of the amount of flat-rate addition payments over the amount of non-recoverable tax on input costs.

Revenue are currently reviewing business structures and models operating in the poultry sector and are carrying out a number of enquiries on farmers, processors and other parties including special purpose vehicles operating within this sector. The purpose of these enquiries is to examine whether or not there are business models, practices or special contractual arrangements in place that are giving rise to an excess of flat-rate addition payments over non-recoverable VAT input costs and the future plans of those parties in light of the new legislative provision.    

If this examination of the poultry sector concludes that there is systematic overcompensation of unregistered farmers, the Ministerial Order is an available action. You might recall from the Dail debate on this provision that many Deputies asked that the industry be given time to restructure its operations and I acceded to this request and undertook not to make such an order until the latter part of 2017.

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