The VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In accordance with Irish VAT legislation, agricultural equipment is liable to VAT at the standard rate, currently 23%, and there is no discretion, under the Directive, to reduce the rate of VAT or to apply a zero rate to these goods.
I am advised by Revenue that farmers may elect to register for VAT or be treated as flat-rate farmers for VAT purposes. Farmers that are registered for VAT have an entitlement to reclaim VAT charged on costs incurred in relation to the farm business, including VAT borne on the purchase of agricultural equipment. Farmers that are not registered for VAT are compensated for the VAT incurred on goods and services used in the course of their farming business, including purchases of agricultural machinery, through the flat rate addition they receive on payments for their supplies of agricultural produce and services.