Dáil Éireann Debate, Wednesday - 19 January 2022
308. Deputy Jackie Cahill asked the Minister for Finance if the sale of greyhounds for racing is considered a hobby and therefore the proceeds from same are not taxable; and if he will make a statement on the matter. [63457/21]
View answerThere is no specific income tax relief available for the sale of greyhounds for racing. However, I am advised by Revenue that an individual’s ownership and racing of greyhounds is generally considered a “hobby” or a “recreational activity” and therefore outside the scope of the income tax system.
Where a greyhound maintained as part of a hobby activity is sold, any profit arising on the sale is not liable to income tax. This also means that any associated costs incurred, or losses suffered, in relation to the greyhound are not deductible for tax purposes.
This treatment does not apply to greyhound breeders. Profits or gains arising from the sale of stud greyhound services is generally considered a trading activity and any income from the sale of those services and related activities must be taken into account in computing the taxable income of the trade.
In determining whether an individual is trading, each situation would need to be considered based on its own particular facts. As set out above, whether the proceeds of sale are taxable or fall outside the scope of income tax for the individual depends on whether the sale is made as part of a trading activity or a hobby activity.
In relation to Value-Added Tax (VAT), the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the EU VAT Directive provides that supplies of goods and services are chargeable to VAT at the standard rate. However, Ireland by way of derogation from the general rule is permitted to continue to apply a reduced rate, currently 13.5%, to the supply of live greyhounds.
Under VAT law, traders/businesses are required to register for VAT where their taxable supplies exceed certain thresholds. Where a VAT-registered trader/business is engaged in the sale of live greyhounds they are required to charge VAT on those supplies at the appropriate reduced rate.
Individuals acting in their private capacity are not VAT-registered traders, and so they are generally not required to charge VAT on anything they sell, including live greyhounds.
