Revenue has confirmed that computerised or automatic calf feeders are “not refundable” under the VAT refund order.
In a statement to Agriland Revenue detailed that farmers who register for VAT have an “entitlement” to reclaim VAT on costs incurred in relation to their agricultural business.
“A farmer who has elected to register for VAT and charges VAT on their supplies can claim a deduction for VAT incurred on costs that are used for the purposes of their taxable supplies.
“Alternatively, farmers can remain unregistered and opt for the Flat Rate Farmer’s Scheme,” Revenue added.
However it also advised that unregistered farmers may also be able to avail of a VAT refund on certain expenses allowed under the Value-Added Tax 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; and 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,” it stated.
Revenue has also stressed that a VAT refund “may be allowed in certain circumstances” if farm equipment is “permanently installed”.
It added: “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”.
Farming organisations and a number of TDs and senators have highlighted that some farmers who had previously been able to claim VAT refunds said they were no longer able to do so and this in turn was causing stress and impacting on farm investment plans.
Revenue told Agriland that it “has not changed its approach to the refund order”.
“Each claim is assessed on its own merits, and claims that do not meet the conditions of the refund order cannot qualify for a refund of the VAT,” It added.
ICMSA
Revenue confirmed that it has met with a number of farming organisations to discuss its approach to VAT and farmers including the Irish Creamery Milk Suppliers Association (ICMSA).
But the president of ICMSA, Denis Drennan, said in his opinion the government is “in a hole and still digging” on the question of perceived changes to the VAT reclaim regime for purchased farm machinery.
Drennan said that the association is being contacted on “a daily basis” by people who have been refused a VAT refund on items of equipment, including bulk tanks, which he said previously “had been allowable for VAT reclaim until very recently”.
He believes that the onus is now on the government “to fix the problem it has caused”.
“ICMSA has been saying from the get go that the government would have to step in and remedy that which it had ruined. We are still waiting and they are still prevaricating.
“They are going to have to stop and accept responsibility for this mess of their own making,” Drennan added.
Refund
Meanwhile according to the Minister for Finance, Michael McGrath, a total of 7,615 farmers had their claims for a refund under the Value-Added Tax Refund Order approved by Revenue during the last two months of 2023.
The minister also confirmed that 349 farmers had their claims rejected in this period.
Where a refund is refused by Revenue a farmer can appeal the decision to the Tax Appeals Commission.
