Kerry Co-op has welcomed a decision by the Revenue Commissioners not to appeal a High Count ruling on the co-op’s patronage shares.
Revenue confirmed in a statement to Agriland that it will not appeal the court decision. It will be dealing directly with the shareholders involved regarding the tax implications.
Speaking this morning (Friday, June 24) Denis Carroll, chairperson of Kerry Co-op, said: “The board of Kerry Co-op welcomes the decision of the Revenue Commissioners relating to his serious issue.
“This is hugely significant and very positive news, not only for our 3,500 milk suppliers but for co-operatives across the country.”
Revenue’s decision “closes a long and arduous chapter relating to the correct and appropriate tax treatment of patronage shares”, Carroll added.
In 2016, around 400 Kerry Co-op shareholders received letters from Revenue informing them of a possible tax liability.
This related to co-op patronage shares issued to them from 2011 to 2013.
It was Revenue’s position that the shares should be classed as additional trading income and, as such, be subject to income tax, the Universal Social Charge (USC) and Pay-Related Social Insurance (PRSI).
If this had been applied to all of the co-op’s 3,500 milk suppliers, it would have resulted in a multi-million euro tax bill.
It is understood that some of the shareholders contacted by Revenue in 2016 may have made payments to cover the tax demand.
As well as that, it appears a small number of shareholders who did not pay were refused a state pension due to their tax affairs not being in order.
In 2017, Kerry Co-op brought a test case, involving one farmer, to the Tax Appeals Commission.
In 2020, the commission determined that the patronage shares should not be classed as income, a decision that was appealed by Revenue.
Last month, the High Court rejected that appeal, upholding the decision from the Tax Appeals Commission.
Revenue had 28 days to lodge an appeal, but has decided against such a move.