Tuesday, 1 April 2014

Questions (469)

Heather Humphreys

Question:

469. Deputy Heather Humphreys asked the Minister for Agriculture, Food and the Marine his views on the introduction of a tax exemption for farmers who have to sell entitlements of a value over €37,500 before 15 May 2014; if such a transaction will be subject to VAT at 23%; his views on the problems this will cause some farmers who may not be registered for VAT and, therefore, will be unable to claim back on the sale; and if he will make a statement on the matter. [15026/14]

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Written answers (Question to Agriculture)

This issue arises where entire holdings have been leased out with entitlements for a period which includes 2013. In order to preserve the value of these entitlements for the new direct payment scheme, lessors need to transfer them permanently before 15 May 2014 to a person who is deemed to be an 'active farmer'.

Officials from my Department have had discussions with the Department of Finance regarding the particular tax implications of the transfer of leased-out entitlements. It has been confirmed that, in accordance with tax law, this will give rise to a tax liability. I have written to the Minister of Finance outlining the situation and asking him to consider whether there are any options in this regard.