Willie Penrose (Longford-Westmeath, Labour)
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91. To ask the Minister for Finance if he will release the microeconomic statistics for the relevant three year timeframe pertaining to the calculation of the current flat rate VAT repayment percentage of 5.4% with the calculation deriving therefrom; the amount of under or overpayment arising; if same was included separately in the economic accounts for European agriculture, EEA; and if he will make a statement on the matter. [40691/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am informed by the Revenue Commissioners that the farmer flat rate methodology is based on detailed estimates across the major items of the Agricultural Accounts, these are produced by the Central Statistics Office to meet both national and EU requirements and are part of the Economic Accounts of Agriculture (EAA) framework. The published estimates provide information such as output, input costs, gross and net value added and operating surplus. A breakdown of items of expenditure such as feed, electricity, fuel, maintenance and repair, etc. is estimated from the National Farm Survey (NFS) where the average expenses per farm is available by type and size of farm. This information is used to estimate the apportionment of expenditure across different expenditure types. Additional adjustments are made to account for VAT registered farmers and VAT refunded to VAT unregistered farmers.

The flat rate addition is designed to compensate VAT unregistered farmers on an overall basis for the VAT charged to them on the purchases of goods and services. VAT unregistered farmers add this percentage to their prices when selling to VAT registered businesses (co-ops, meat factories, etc.) who treat the flat rate amount as a normal business input in their periodic VAT returns.

In accordance with Article 298 of the EU VAT Directive the maximum level of the flat rate addition is calculated annually based on an average of the last three years rates. It is open to the Member State to decide what flat rate level to apply but it has been the policy of successive Governments in Ireland to grant full compensation. The flat rate statistics for each of the relevant three years pertaining to the 5.4% rate as calculated ahead of Budget 2017 were as follows:

The statistics which underpin these rates are continually subject to review in the context of annual reviews relating to VAT Own Resources. The percentages may increase or decrease upon review, but this does not change the legal method of calculating the flat-rate addition based on figures available at the time of calculation.