Officials from Revenue will be quizzed by TDs and senators at the Joint Oireachtas Committee on Agriculture, Food and the Marine over the issue of VAT refunds for unregistered farmers.
The meeting will take place in Committee Room 3 of Leinster House tomorrow evening (Wednesday, May 8) from 5:30p.m.
It is the first of two sessions of the agriculture committee tomorrow. The second, beginning at 7:00p.m, will see officials from the Department of Agriculture, Food and the Marine addressing the committee on the implementation plan for Ireland’s Forest Strategy.
The committee meeting with Revenue officials comes after the state agency told Agriland that it is “engaging proactively” with farming organisations in relation to the Flat Rate Farmers’ Scheme and has “invited” further submissions from the farming sector on the issue of VAT refunds.
Speaking ahead of tomorrow’s committee meeting, Senator Tim Lombard, the vice-chairperson of the committee, said that Revenue has been asked to the committee to “discuss [its] change of interpretation of existing legislation in relation to refunds of VAT to unregistered farmers”.
Revenue maintains there has been no major change to the legislation and that it has not changed its approach to the refund order.
However, political and farming leaders have claimed this is not the case and that farmers throughout the country have been refused a VAT refund on items of equipment, including bulk tanks, which they had previously been allowed to claim on.
Lombard said that it is an issue that “has caused much unease and confusion for farmers in recent months”.
According to Lombard, there is “a feeling in farming communities that they have been treated unfairly with the change in approach from Revenue in relation to VAT refunds”.
“I welcome the fact that the officials from the office of the Revenue Commissioners have accepted the invitation to attend the committee meeting tomorrow evening and I hope that we can get some clarity for everyone on VAT refunds to unregistered farmers at this meeting,” the Fine Gael senator added.
Officials from the Department of Finance have already held meetings with both the Irish Creamery Milk Suppliers’ Association (ICMSA) and the Irish Farmers’ Association (IFA) to discuss its current approach to VAT refunds for unregistered farmers.
The Minister for Finance, Michael McGrath, has previously outlined that farmers who elect to register for VAT are obliged to account for VAT on their supplies and are entitled to claim a deduction based on inputs used for the purposes of their taxable supplies.
But farmers can also remain unregistered for VAT purposes, and opt for the Flat Rate Farmers’ Scheme.
According to Revenue, these farmers are unable to claim refunds when they purchase feed bins, milk bulk tanks, automatic calf feeders or milking parlour equipment.
But it is also understood that where the installation of certain equipment – including some of the items listed above – requires the alteration or reconstruction of a farm building or structure, the corresponding outlay has been allowed in certain circumstances.
“Each claim is assessed on its own merits. Claims that do not meet the conditions of the refund order cannot qualify for a refund of the VAT,” Minister McGrath stated.
Revenue has previously indicated that it intends to publish updated guidance in May.