Dáil Éireann Debate, Tuesday - 29 September 2026
131. Deputy Aindrias Moynihan asked the Tánaiste and Minister for Finance if he will review the farmer VAT flat rate addition, given concerns that it places financial pressure on smaller farmer incomes; and if he will make a statement on the matter. [68541/26]
Amharc ar fhreagraAs the Deputy will be aware, it is a longstanding practice that the Minister for Finance does not comment, in advance of the Budget, on any tax matters that may be the subject of Budget decisions.
However, I can confirm that the level of the flat-rate addition is calculated in accordance with the EU VAT Directive and is set out in Irish VAT legislation.
It is reviewed annually on the basis of macro-economic data received from the Central Statistics Office (CSO) for the preceding three years in line with the EU VAT Directive requirements.
Following such review, if needed, the level of the flat-rate percentage is re-set under law, in order to ensure that the Scheme continues to allow appropriately for the unregistered farming sector to be fully compensated, on an overall basis, for the VAT it incurs across all its inputs – those inputs being variously taxed at the VAT standard rate of 23%, the reduced rate of 13.5%, the second reduced rate of 9%, the livestock rate of 4.8%, and the zero rate.
Some years the review results in an upward re-set of the flat rate, some years it results in a downward re-set.
It is important to note that any change to the farmers flat rate addition is determined by the requirements of EU VAT law, that the VAT Directive requires that the flat rate scheme is compensatory rather than subsidising, and that it does not permit the Minister of the day to change the manner in which it is calculated.
