The Revenue Commissioners has confirmed that it is “considering” a High Court ruling relating to the tax treatment of Kerry Co-op patronage shares.
In November 2016, Revenue wrote to around 400 Kerry Co-op shareholders informing them of a possible tax liability on patronage shares issued to them in the years 2011-2013.
Revenue declared that the shares must be regarded as trading income and subject to income tax, USC, and PSRI. This would have resulted in a potential multi-million euro tax bill for Kerry Group’s 3,500 milk suppliers.
Following this, Kerry Co-op brought a test case, involving an individual farmer, before the Tax Appeals Commission, which ruled against Revenue in 2020 and determined that the shares should not be classed as income.
This decision was subsequently appealed to the High Court by Revenue. Agriland understands that the court has now decided to uphold the decision of the Tax Appeals Commission.
It is believed that Revenue has 28 days from the date of the judgement in which to lodge an appeal.
When contacted by Agriland, a spokesperson for Revenue said:
“As a matter of policy, Revenue does not comment on specific cases. However, Revenue is considering the court’s decision and its implications.”
A written judgement from the High Court is expected in the coming days.
Kerry Co-op shareholder meeting
Meanwhile, two resolutions containing proposed changes to the Kerry Co-op rulebook are set to be put to shareholders at a special general meeting (SGM) in Killarney on June 21.
The meeting will be held after the Kerry Co-op Annual General Meeting (AGM) has concluded.
The first resolution relates to the rotation of the Kerry Co-op board across its five-year electoral cycle and proposes to address an “anomaly” which arose following a review of representation on the board in 2019.
The second resolution relates to the minimum notice period required for the holding of special board meetings and “related communication matters”.
Agriland understands that following legal advice, the board decided against putting a further resolution to shareholders.
This included placing the existing share redemption scheme into the rulebook and preventing the board from spending more than €50 million without the consent of shareholders.