Vol. 499 No. 4
123 Mr. McGuinness asked the Minister for Finance if his Department has considered the case made by the IFA regarding VAT treatment of AI services and semen sales; his views on whether this system should be recognised as an AI service and therefore be exempt from VAT; if he will address this matter in the context of the Finance Bill; and if he will make a statement on the matter. [2891/99]
Arising from concerns about distortions of competition in the area of artificial insemination, the 1998 Finance Act changed the VAT treatment of livestock semen sales and services. It required that AI stations and other taxable persons who sell livestock semen directly to farmers should register and account for VAT if sales of semen exceeded the goods registration threshold of £40,000 in any 12 month period. Sales of livestock semen were chargeable at the 12WP extended char 4,17 per cent rate of VAT. Sales of pig semen by farmers are also subject to the same registration and rate requirements. AI stations retain their flat rate farmers status and do not have to register in respect of any AI service they provide.
I am aware of the case made by the IFA in this regard. Introducing a change to the VAT regime for pig semen only could undermine the equal treatment of sales of livestock semen introduced in the 1998 Finance Act. The Revenue Commissioners will be meeting a firm in this sector shortly to discuss this issue but, while they will be examining the matter, I do not anticipate the prospect of a change in the Finance Bill.
