Section 86A of the VAT Consolidation Act 2010 was introduced in Finance Act 2016 to provide a mechanism for addressing situations where the business models in any agricultural sector allow for higher levels of flat-rate addition payments to be paid compared with the VAT borne on input costs.
I am advised by the Revenue Commissioners that, following the introduction of Section 86A of the VAT Consolidation Act 2010, a detailed examination of the business structures, models and contractual arrangements in place between parties within the sector was undertaken. Detailed examinations are being carried out on a statistically representative sample of flat-rate farmers operating in the poultry sector to determine if there is a systematic excess of the amount of flat-rate addition payments in the sector.
The first phase of interventions has been completed and a second phase of interventions will be completed shortly. At the conclusion of this examination, if there is evidence of overcompensation within that sector as a result of business structures and contractual arrangements, Revenue will complete a report to be submitted to my Department. Where, following this review, I am satisfied that there is a systematic excess of flat-rate addition payments over VAT on inputs incurred by flat-rate farmers in that sector, that sector may be excluded from the flat-rate scheme by way of Ministerial Order .