Michael Fitzmaurice (Roscommon-Galway, Independent)
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42. To ask the Minister for Finance if he has been lobbied in relation to flat rate VAT on feedlots; and if he will make a statement on the matter. [46944/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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I can confirm to the Deputy that I have received two items of correspondence, the first in January 2018 and the second in September 2019 that referenced the flat rate VAT on feedlots and raised questions about possible excess flat-rate payments to farmers involved in the rearing of livestock for the beef sector. However, to date Revenue has not established that business models and contractual arrangements exist or are common in this sector that create the conditions for the generation of a systematic excess of flat-rate addition payments to farmers over their VAT input costs.  A flat-rate farmer involved in a business in which cattle are bought from other flat-rate farmers and reared for a further limited period before being supplied to a VAT registered business such as a beef processor would normally receive a flat-rate addition payment that exceeded his or her VAT input cost; however, the payment might not exceed the total VAT input costs associated with rearing the animal incurred by all the farmers involved in the process. It would be expected that the price paid to flat-rate famers supplying to another flat-rate farmer would take account of the flat-rate ‘credit’ being transferred with the animal. I will however continue to monitor the beef sector and other agricultural sectors to ensure that the flat-rate addition scheme does not operate to give rise to overcompensation of farmers at the aggregate level for VAT on input costs.

If the Deputy has information of particular contractual arrangements in the beef sector that could give rise to a systematic excess of flat-rate addition payments to farmers involved in beef production, he should provide it to Revenue.