Dáil Éireann Debate, Wednesday - 7 October 2020
55. Deputy Colm Burke asked the Minister for Finance if consideration will be given to the exemption of VAT, within the European Union VAT directive, on all farm safety equipment which will act as a vector to improve uptake of farm safety equipment by farmers and in turn may reduce the high fatality rate within the agricultural sector; and if he will make a statement on the matter. [29039/20]
View answer56. Deputy Colm Burke asked the Minister for Finance if consideration will be given to a review of a VAT exemption on sexed semen for all farmers; and if he will make a statement on the matter. [29040/20]
View answerI propose to take Questions Nos. 55 and 56 together.
I am advised by Revenue that the VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. Supplies of capital goods in the agriculture sector, including farm machinery and equipment, is liable to VAT at the standard rate, currently 21%, and there is no scope under the Directive to apply a reduced rate or to exempt such supplies. The Directive specifies categories of goods and services in respect of which Member States may apply a reduced rate of VAT, which include the supply of livestock semen and animal insemination services; Ireland applies the reduced rate of VAT, currently 13.5%, to these supplies. The Directive does not permit the exemption of such supplies from VAT.
Farmers may register for VAT or be treated as flat-rate farmers for VAT purposes. Farmers who elect to register for VAT have an entitlement to reclaim VAT on costs, including farm machinery and equipment and semen costs, incurred in relation to their farm business; if they remain unregistered they are entitled to apply a flat-rate addition to their supplies to VAT registered businesses. The flat rate addition compensates farmers at the aggregate level for the VAT borne on input costs, including farm machinery and equipment and semen costs.
