The tax demands from the Revenue Commissioners on 400 Kerry milk suppliers is an attack on the co-operative movement, according to James O’Donnell, a Co Limerick farmer.

The issue of the Revenue Commissioners writing to 400 Kerry suppliers was a hot topic at the associations AGM in Limerick this week.

Speaking at the AGM, O’Donnell said that these demands will make co-ops vulnerable to be taken over by vulture funds.

“I’d just like to highlight that if this interpretation is to be followed through on, all co-op shares of any description, will have to be treated in the same way and this is an attack on the entire co-operative movement and totally against the fundamentals of family farms.”

On the issue, the Minister for Agriculture, Michael Creed said that he is aware of the issue and has had some direct engagement with Kerry suppliers in his constituency.

“I know that Revenue are coming in before the Oireachtas Joint Committee on Finance [Public Expenditure and Reform] next week.

“There’s a process underway where Kerry Co-op are engaged with the Revenue for clarity on this matter.

“The issue appears to be that there’s a value being attached by Revenue in terms of your annual income to the loyalty share which was issued.

“Revenue acts independently but there needs to be clarity there because there is a knock on consequence in respect of the issue for not just other Kerry members but for all other co-ops who operate in the same way.”

Meanwhile, another farmer speaking from the floor said that the Minister for Agriculture needs to put pressure on the Revenue to say that this is not on.

Last week, 400 Kerry milk suppliers received letters from the Revenue Commissioners with tax demands ranging in prices from €15,000 to €30,000 linked to patronage shares issued to them between 2011 and 2013.

The Revenue has declared that the shares must be regarded as trading income and subject to income tax, USC, and PSRI.  The recipient farmers have been given 21 days to reply.