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“The Revenue Commissioners are 100% absolutely convinced at the highest level in the organisation that this is liable to income tax,” Revenue official Charlie Phelan told the Oireachtas Finance Committee on Wednesday.
The 400 farmers who received letters from Revenue regarding their patronage shares in Kerry Co-op have until this Friday to respond.
Tax advisers were advised to appeal against Revenue’s stance to the Tax Appeals Commission at a meeting organised by Kerry Co-op in Tralee last Thursday. The advice came from Kerry Co-op’s tax adviser Padraig Cronin and secretary Brian Durran.
Killarney accountant Seán O’Rourke warned farmers to take care over how they respond to Revenue.
“There’s a Revenue code of practice on the unprompted voluntary disclosure system and the appeals process. Each have strict timelines and correct wording on letters is vital. A mistake here could mean the loss of lower interest and penalties, should the test case be lost,” O’Rourke said.
Farmers must engage with Revenue in the 21-day time frame set out in Revenue’s letter, IFA president Joe Healy has said. “A template letter for appealing the Revenue assessment has been developed by Deloitte for Kerry Co-op, and I have asked Kerry Co-op to ensure all their farmer suppliers are urgently made aware of it and encouraged to use it,” Healy said.
Meanwhile, co-op secretaries from all over the country gathered for an ICOS meeting in Portlaoise last Thursday to assess the fallout.
ICOS chief executive TJ Flanagan said ICOS had sought its own legal advice in relation to how best to ensure patronage shares will not be treated negatively in the tax code.
“ICOS sees patronage shares as a very important tool that allows co-ops to concentrate ownership in active milk suppliers and reward loyalty,” said Flanagan. “Co-op shares have no real market value on the day of issue and cannot be sold or withdrawn in exchange for cash.”
Separately, Mundy Hayes from Kilflynn has been elected as chair of Kerry Co-op.
Additional reporting by Thomas Hubert.
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