Tuesday, 21 September 2021
Department of Finance
23. To ask the Minister for Finance the status of a proposed review into extending section 664A of the Taxes Consolidation Act 1997 to include agricultural contractors for the purpose of providing them similar status as farmers regarding the carbon tax on green diesel. [44744/21]
The present position is that agricultural contractors are not entitled to avail of relief from increases in the carbon tax on farm diesel under section 664A of the Taxes Consolidation Act 1997.
This is because farming, which is defined in section 654 of the Taxes Consolidation Act, requires that the occupation of farmland; agricultural contracting does not involve the occupation of farmland. The measure is specifically targeted at the farming sector to address the particular problems faced by family farms.
My officials met with contractors' representatives in December 2019 and advised that my Department was intending to schedule a review of the scheme (and related aspects) in the context of a wider report on agri-tax reliefs and the Government's Climate policy.
The onset of the Covid-19 pandemic in the intervening period caused the review to be deferred and it has yet to take place. In the meantime, the status quo has remained in relation to the application and scope of section 664A.
I would note however that, currently, those who incur expenses in relation to farm diesel in the course of their trade of agricultural contracting may claim an income tax or corporation tax deduction for these expenses, including any carbon tax charged in respect of the diesel.
Having regard to the steady progress that is now being made in reopening the economy and removing the public health restrictions that have curtailed economic activity, my Department is hopeful that the way will be clear for the promised review to be carried out, most likely in the early part of 2022.