Seán Canney (Galway East, Independent)
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200.To ask the Minister for Finance the reason recycled plastic water drinking troughs are not included in the list of components that a farmer can reclaim VAT on; and if he will make a statement on the matter. [25508/24]

Michael McGrath (Cork South Central, Fianna Fail)
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The VAT treatment of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In accordance with the EU VAT Directive, farmers can elect whether or not to register for VAT in respect of their farming business, and each farmer’s decision on this matter affects how VAT incurred on their inputs (such as the purchase of farm equipment) is treated.

Under VAT law, unregistered farmers can avail of the Flat-rate Farmers Scheme. This arrangement, which is unique to the farming sector, allows farmers to choose to remain unregistered for VAT and yet be compensated on an overall basis for the VAT they incur in the course of their business, while still remaining outside the VAT system and avoiding the burden of registration and filing. The Scheme is designed as an administrative simplification measure and allows unregistered farmers to add and retain a percentage charge (known as the “flat-rate addition”) onto the amount they invoice VAT-registered businesses whom they supply with agricultural goods and services in the course of their farming business. As is normal for VAT-unregistered businesses, unregistered farmers are not entitled to reclaim VAT incurred on the various individual inputs used in their farming business.

There are certain limited situations, however, in which flat-rate farmers are specifically permitted by law to claim a refund of the VAT incurred by them on particular inputs. The Value-Added Tax (Refund of Tax) (Flat-rate Farmers) Order 2012 (S.I. No. 201/2012) is the relevant legislation. It allows for refunds to be claimed by VAT-unregistered farmers in relation to outlay on the following only:

• the construction, extension, alteration or reconstruction of a farm buildings or structures.
• the fencing, draining and reclamation of farmland; and
• the construction and/or installation of qualifying equipment for the purpose of micro-generation of electricity for use in a farm business.

Revenue published a Tax and Duty Manual (TDM) on 4 June 2024 to provide further guidance on the Refund Order. The TDM outlines how VAT can be reclaimed under the Refund Order by flat-rate farmers, the conditions under which VAT may be reclaimed, guidance on the types of expenditure on which VAT can and cannot be reclaimed, and the information required to make a claim.

The TDM explains that VAT may be refunded in circumstances where goods, which themselves are outside the scope of the Refund Order, are installed into a farm building in such a way that they become a fixture. The concept of what constitutes a fixture and what is merely a fitting is well-established in VAT rules. Fixtures are goods which have become closely linked to or integrated into a building in such a way that they cannot be removed without substantial damage or significant alteration being caused to the goods themselves or to the building or construction to which they are installed.

Sections 5.7, 5.9 and 5.9.2 of the Revenue guidance document provide further detail on this matter. To qualify under the Order, the farming equipment or machinery would need to be permanently installed in a newly constructed / altered or extended farm building and once installed, cannot be removed without causing significant alteration, substantial damage, or destruction to the farm building or to the equipment or machinery itself. Minor changes such as items nailed, screwed, or bolted to the building walls or floor would not be considered an alteration for the purposes of the order. Also, Revenue will consider the effort, time, cost, and impact on the equipment itself to determine if there is significant alteration, substantial damage or destruction of the farm building or structure or to the equipment itself. Equipment that can be removed and re-sold intact and used for its original purpose will not be eligible for a refund. Mobile equipment or machinery is not refundable under the Order.

On this basis, it is not likely that an installed recycled plastic drinking trough would constitute a fixture and, therefore, it is unlikely to be eligible for a refund. However, each claim is assessed on its own merits. Claimants are encouraged to provide supporting documentation, photos, detailed description of works carried out to the building or structure to allow for the installation of fixtures and any contracts associated with same when submitting their claims.

Where the equipment is not refundable under the Order, any construction, reconstruction or alteration work related to the installation of the equipment into the farm building or structure may be allowed. Claimants should provide details of the works carried out, invoices and photographs.

Finally, the Deputy may wish to note, that it is always open to a farmer to elect to register for VAT in respect of their farming business. VAT-registered businesses are entitled to claim a full deduction for the VAT they incur on their business costs, subject to rules on deducibility.

Bernard Durkan (Kildare North, Fine Gael)
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201.To ask the Minister for Finance the status of any debt for local property tax owed in the case of a person (details supplied) given there was a delay in her receiving a PPS number following the death of her spouse; and if he will make a statement on the matter. [25515/24]

Michael McGrath (Cork South Central, Fianna Fail)
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I am advised by Revenue that the ownership of the property concerned was updated on 8 February 2024 to reflect the individual as the designated liable person of the property for Local Property Tax (LPT) purposes.

Revenue have confirmed that LPT payments and returns have been received for all years and the LPT property record is in order.

Should the person concerned have any further queries regarding LPT, they can contact Revenue via the LPT Helpline on (01) 738 36 26, from 9:30am-4:30pm, Monday to Friday.