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Farm Safety

Dáil Éireann Debate, Tuesday - 26 July 2022

Tuesday, 26 July 2022

Questions (2166)

Holly Cairns

Question:

2166. Deputy Holly Cairns asked the Minister for Agriculture, Food and the Marine his engagement with the Minister for Finance to permit farmers to claim back VAT on farm safety equipment. [41742/22]

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Written answers

As the Deputy is aware, taxation is primarily the responsibility of the Minister for Finance. However, our Departments work closely to ensure that agri-taxation is consistent with Government priorities for the agri-food sector.

I am advised that, in accordance with the EU VAT rules and Irish VAT law, farmers may elect to register for VAT or to be treated as flat-rate farmers for VAT purposes.

Farmers who elect to register for VAT have an entitlement to reclaim VAT on costs incurred in relation to their agricultural business including farm safety equipment. A farmer who has elected to register for VAT is obliged to charge VAT on their supplies and can also claim a deduction for VAT incurred on costs that are used for the purposes of their taxable supplies.

Alternatively, farmers can remain unregistered and opt for the Flat Rate Scheme which is designed to compensate non-VAT registered farmers for the VAT incurred by them on the purchase of goods and services relating to their activities. The Scheme sets out a percentage amount, known as the flat-rate addition, which unregistered farmers apply to their prices when selling to VAT-registered businesses. Farmers are allowed to retain this amount themselves, as a compensation for the VAT borne by them on their input costs. This simplification reduces the administrative burden for these farmers, as there is no need to register for VAT to recover VAT borne on their inputs. The Scheme is governed by EU VAT law and the level of the flat-rate addition allowed under the Scheme is required to be reviewed annually. From 1st January 2022 the flat-rate addition is 5.5%.

Minister of State Martin Heydon, who has special responsibility for farm safety, and I continue to work to address the unacceptable level of accidents and fatalities on Irish farms.

Collaboration between my Department and the Department of Finance led to the introduction in Budget 2021 of the Acceleration of Wear and Tear Allowances for Farm Safety Equipment Scheme, an important measure to promote safer farming practices. This Scheme provides for Accelerated Capital Allowances of 50% per annum over two years on qualifying farm safety and adaptive equipment.

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