Clare Daly
Ceist:69. Deputy Clare Daly asked the Minister for Finance his plans to reform the preferential treatment of farmers in regard to VAT. [3746/18]
Amharc ar fhreagraThursday, 25 January 2018
Ceisteanna (69)
Freagraí scríofa
I am advised by Revenue that in accordance with the EU VAT Directive farmers may register for VAT or be treated as flat-rate farmers for VAT purposes.
The flat rate scheme is designed to compensate non-VAT registered farmers for the VAT incurred by them on the purchases of goods and services relating to their activities. The scheme sets out a percentage amount (currently 5.4%), known as the flat-rate addition, which unregistered farmers apply to their prices when selling to VAT-registered businesses (co-operatives, meat factories, etc). The VAT-registered business treats the flat-rate amount as a normal business input in its periodic VAT return, claiming input credit for the flat-rate amount paid to the flat-rate farmer. In this way, farmers are compensated for the VAT borne by them on their input costs, and this simplification reduces the administrative burden for them as there is no need to register for VAT to recover VAT borne on their inputs. Under the EU VAT directive, the flat-rate addition is calculated using macro-economic statistics for the preceding three years. Member States are not allowed to fix a rate independently.
I have no plans to reform the current system.