Dáil Éireann Debate, Tuesday - 18 December 2012
160. Deputy Éamon Ó Cuív asked the Minister for Finance the total cost to the Exchequer in a full year of new tax reliefs introduced in Budgets 2012 and 2013, directed at the agricultural sector, the break down of the saving per relief; and if he will make a statement on the matter. [56612/12]
View answerThe tax changes introduced in Budgets 2012 and 2013 which have particular relevance to the agricultural sector are set out below.
Budget 2012
Extension of the existing VAT Refund Order for flat-rate farmers to include a refund on the purchase of wind turbines
Budget 2012 provided for an extension to the VAT refund order for unregistered farmers to wind turbines and other micro-energy generators purchased from 1 January 2012. Up to then the scheme provided for the refund of VAT paid by such farmers on the construction of farm buildings, fencing, drainage and reclamation of farm land. This measure costs the Exchequer €1m in a full year.
Admissions to open farms to apply at the 9% reduced rate
Following changes at EU level, admissions to open farms became liable to VAT from 1 January 2012. Consistent with the VAT reduction in respect of the tourist industry, Budget 2012 provided that the rate of VAT on admissions to open farms would apply at the reduced rate of 9%. There was no cost to this measure.
Stock Relief for Registered Farm Partnerships
An enhanced 50% stock relief (100% for certain young trained farmers) for registered farm partnerships was introduced and will run until 31 December 2015 subject to clearance with the European Commission under State Aid rules. This is estimated to cost €3m in 2012 and €5m in a full year.
Budget 2013
Relief for Farm Restructuring
Relief will be available where the proceeds of a sale of farm land that enables farm restructuring are reinvested for the same purpose. The sale and purchase of the farm land must occur within 24 months of each other and the initial sale or purchase transaction must occur within the period commencing 1 January 2013 and ending on 31 December 2015. The relief will also apply to farm land swaps. Certification by Teagasc will be required for all transactions seeking relief. The commencement of the relief is subject to receipt of EU State Aid approval. The relief is estimated to cost €5 million in a full year.
Reduction in the Farmer's Flat-Rate Addition from 5.2% to 4.8%
The farmers' VAT flat-rate addition for un-registered farmers is being reduced as part of Budget 2013 from 5.2% to 4.8% with effect from 1 January 2013. This will yield the Exchequer €18 million in 2013 and €21 million in a full year. This will bring the overall cost to the Exchequer of the scheme to €249m in a full year. The new 4.8% rate for 2013 continues to achieve full compensation under the scheme. The relief is estimated to cost €1 million in a full year.
Stock Relief
Extend the general rate of stock relief of 25% for a further three years to 2015. This is estimated to cost €1m in a full year.
Young Trained Farmers stock relief
Extend the YTF rate of stock relief of 100% for a further three years to 2015, subject to EU State Aid clearance. The relief is estimated to cost €1 million in a full year.
Stock relief for registered farm partnerships
Extend definition of registered farm partnership to include other registered partnerships such as beef production partnerships for the purposes of the 50% rate of stock relief, subject to EU State Aid clearance. This is estimated to cost €1m in a full year.
In addition, although not solely available to the Agriculture sector, I announced an extension of the Foreign Earnings Deduction (FED) in Budget 2013 such that it will now be available for work-related travel to Algeria, Democratic Republic of Congo, Egypt, Ghana, Kenya, Nigeria, Senegal and Tanzania. These countries have been identified by the Department of Agriculture, Food and the Marine, as having the potential to become important trading partners for Irish based businesses operating in the agri-food sector.
