Written answers

Thursday, 16 December 2021

Photo of Violet WynneViolet Wynne (Clare, Sinn Fein)
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242. To ask the Minister for Finance if the 90% agricultural relief from CAT will continue as a retention of current taxation measures; and if he will make a statement on the matter. [62713/21]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy is aware, CAT Agricultural Relief enables qualifying farmers to reduce their liability to CAT by 90%. The relief operates by reducing the market value of 'agricultural property' (including farmland, buildings, stock) by 90%, so that gift or inheritance tax is calculated on an amount known as the 'agricultural value',  which is substantially less than the market value.

To qualify for agricultural relief, 80% of the beneficiary’s assets, after having received the gift/inheritance, must consist of qualifying agricultural assets. The beneficiary must also be an active farmer or lease the land to one. Agricultural Relief has been available for gift and inheritance tax since the introduction of Capital Acquisitions Tax in 1976.

I recognise that CAT Agricultural Relief  is a key relief in ensuring the inter-generational transfer of farm assets and farm succession planning, and I have no plans to amend it at this time.

Photo of Violet WynneViolet Wynne (Clare, Sinn Fein)
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243. To ask the Minister for Finance if the VAT on farming equipment can be reduced, for example, on slurry equipment to incentivise and make more viable the farming profession. [62714/21]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply.  In accordance with Irish legislation, agricultural equipment is liable to VAT at the standard rate, currently 23%. There is no discretion under the Directive for Ireland to reduce the rate of VAT on these goods.

Farmers may elect to register for VAT or be treated as flat-rate farmers for VAT purposes. Farmers that are registered for VAT have an entitlement to reclaim VAT charged on costs incurred in relation to the farm business, including VAT borne on the purchase of agricultural equipment such as slurry equipment. 

Farmers who are not registered for VAT are entitled to avail of the Flat-Rate Farmers Scheme which compensates them for the VAT incurred on goods and services used in the course of their farming business by allowing them to charge a flat rate addition for their supplies of agricultural produce and services. This long-standing arrangement is provided for under Ireland’s VAT legislation and is permitted under the Directive.

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