Dáil Éireann Debate, Tuesday - 29 March 2022
267. Deputy Matt Carthy asked the Minister for Finance further to Parliamentary Question No. 63 on 9 March 2022, if the Revenue Commissioners intend to update to section 5 of part 23-01-36 in order that the example provided brings clarity to farmers regarding their own calculations of the available rebate in the coming period; and if he will make a statement on the matter. [16170/22]
View answerI am informed by Revenue that Tax and Duty Manuals are regularly reviewed, and updated examples included where necessary to provide clarity to taxpayers. Tax and Duty manual 23-01-36 provides an overview of how relief for the increase in the carbon tax on farm diesel operates, as is provided for by section 664A Taxes Consolidation Act 1997.
The relief operates by allowing farmers, in computing their taxable farming profits, to claim a deduction for farm diesel in an amount equal to the difference between the carbon tax charged and the carbon tax that would have been charged had it been calculated at the rate of €41.30 per 1,000 litres of farm diesel (the 2012 baseline). This deduction is in addition to being able to claim a tax deduction for expenditure incurred on farm diesel (including any carbon tax charged in respect of the diesel.)
The “carbon tax” referred to in section 664A is the carbon component of Mineral Oil Tax for farm diesel, which was introduced on 1 May 2010. The rate of the charge was last increased on 1 May 2021 and is to increase again on 1 May 2022. I am informed by Revenue that it has updated Tax and Duty manual 23-01-36 to provide an additional example to demonstrate how the relief operates using the current rate of the carbon charge component. The updated manual is available on the Revenue website at: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-23/23-01-36.pdf.
