Dáil Éireann díospóireacht -
Wednesday, 20 Nov 1996

Vol. 471 No. 7

Written Answers. - VAT Registration.

Theresa Ahearn

Ceist:

124 Mrs. T. Ahearn asked the Minister for Finance if his attention has been drawn to the fact that smaller companies operating an AI service to farmers are compelled to register for VAT, while Irish AI stations (details supplied) do not have to register; the proposals, if any, he has to introduce equality into the business; and if he will make a statement on the matter. [21687/96]

Minister for Finance (Mr. Quinn)

I am advised by the Revenue Commissioners that under VAT law a farmer engaged in the supply of insemination services retains his farmer status for VAT purposes and is not obliged to register or account for VAT.

This means that an authorised AI station engaged in farming activities rearing and breeding bulls, for example, qualifies as a farmer and is not obliged to register for VAT.

However, companies other than authorised AI stations are prohibited from operating an AI service under the 1947 Livestock Breeding Act, but may engage in direct sales of semen to farmers who operate on a DIY basis. They are obliged to register and account for VAT at the standard rate of VAT of 21 per cent where annual sales exceed £40,000. This can put such companies at a disadvantage as they will be obliged to charge VAT on direct sales of semen whereas authorised AI stations with farmer status and who provide a wider AI service, as distinct from direct sales only, to unregistered farmers will not.

While the Revenue Commissioners and officials in my Department have been aware of the position for some time, I understand that they are awaiting the outcome of a Supreme Court case challenging the monopoly position of the AI stations under agricultural legislation before considering any changes to VAT legislation. I will, however, keep the matter under review.