While issues remain over what farming equipment farmers can purchase that qualifies for a VAT refund, some clarity has been provided by Revenue towards the eligibility of some of these items.
Revenue has stated that there is no change in regulations surrounding VAT refunds, but farmers have experienced a change in interpretation from Revenue over what qualifies for a refund.
Revenue confirmed that VAT refunds will be available on:
- Drafting gates;
- Hydraulic scrapers (sometimes referred to as automatic scrapers);
- New build milking parlours.
It was also confirmed that VAT refunds are not available on:
- Robotic scrapers;
- Heat and health monitoring systems;
- Slurry bags.
Revenue added that published guidance in relation to the Refund Order “will be updated in due course,” once submissions from Irish farm organisations are received and considered.
Motion for discussion
Fianna Fáil TD and chairperson of the Oireachtas Agriculture Committee, Jackie Cahill tabled a motion for discussion at a Fianna Fáil Parliamentary Party meeting on Wednesday, January 24 on the topic of VAT rebates for farmers who are not registered for VAT.
The motion called on Finance Minister, Michael McGrath TD to amend the relevant legislation to make it clear to the Revenue Commissioners that the original interpretation of the law governing VAT rebates should still be followed.
Cahill told Agriland that following the motion, Minister McGrath gave “a firm commitment that he would investigate and explore every possibility of trying to get the status quo restored.
“I was satisfied with the answer I got from the minister.
“Derogation affects a small number of farmers. This is affecting all farmers,” he added.
VAT refund order
The VAT refund order allows for refunds to be claimed on outlay incurred on:
- The construction, extension, alteration or reconstruction of a farm buildings or structures;
- The fencing, draining and reclamation of farmland;
- The construction and/or installation of qualifying equipment for the purpose of micro-generation of electricity for use in a farm business.
The refund order does not, however, provide for relief from VAT suffered on the acquisition of movable goods, such as farm equipment.
However, where the installation of farming equipment requires the alteration or reconstruction of a farm building or structure, the corresponding expenditure on the alteration or reconstruction of the building or structure, including equipment or elements of equipment permanently installed in the farm building or structure, may be allowed in certain circumstances.
The equipment must be permanently installed in the farm building or structure and, once installed, cannot be removed without causing significant damage, or destruction to the farm building or structure or to the equipment itself.