Phil Hogan
Question:155 Mr. Hogan asked the Minister for Finance the criteria for farmers to deregister from VAT registration. [9630/00]
Written Answers. - VAT Registration.
A farmer, as defined in the Value Added Tax Act, 1972, is not required to register for VAT but may elect to register if he or she so wishes. Where a farmer voluntarily becomes registered for VAT and if he or she subsequently wishes to deregister the following conditions must be met.
The farmer must notify Revenue of his or her desire to deregister or that he or she no longer wishes to be treated as taxable. Revenue is then notified by the farmer of the VAT payments made and of the total VAT refunded in the entire period during which the farmer was taxable, or the preceding three years, whichever is the shorter. The farmer then pays Revenue an amount equal to the excess, if any, of the refunds over the payments made for the particular review period chosen. The details of the computation of figures involved are worked out by the local inspector of taxes by reference to the regulations.
If a farmer owns holiday accommodation, there are separate rules for deregistration as a result of changes made in the Finance Act, 2000. The changes in the law require that those who elect to register for VAT in respect of the letting out of holiday accommodation and who have an annual turnover of less than £20,000, must in certain circumstances pay a cancellation amount to the Revenue Commissioners when they cancel their election to register. The cancellation amount is calculated on the basis of the amount of VAT deductible on the property used for the holiday lettings and the length of time the property was let before the cancellation. No cancellation amount is payable if the length of time involved exceeds ten years.