The Irish Farmers Journal understands that the Tax Appeals Commission has ruled that patronage shares issued by Kerry Co-op to milk suppliers will not be subject to income tax.
A full ruling on the matter from the Tax Appeals Commission is expected on Monday but early indications suggest farmers have been successful in their appeal case against Revenue.
Kerry milk suppliers were potentially facing an income tax bill in excess of €17m had they not appealed against Revenue.
The ruling is a major vindication for milk suppliers in Kerry who were first targeted by Revenue in 2016. At the time, the Revenue Commission wrote to almost 400 Kerry milk suppliers saying they were liable for income tax on patronage shares received in 2012 and 2013.
Kerry farmers subsequently appealed the decision to the Tax Appeals Commission and would now appear to have been successful in the test case they took against the Revenue.
What are patronage shares?
Patronage shares are free shares distributed to milk suppliers as a loyalty bonus. Kerry Co-op used the scheme until 2013 and farmers routinely declared the shares as capital assets to Revenue, paying taxes on their value when they transferred them through sale or inheritance.
In 2016, Revenue decided that because the shares were linked to the volume of milk supplied, they constituted trading income and were liable to income tax during the year they were received.
Farmers appealed the decision by Revenue arguing that the shares are not income, as they cannot be traded freely against cash. They also challenged the valuation calculated by Revenue.
The result of this test case will also be welcomes by other co-ops as the stance taken by Revenue could also have had far-reaching implications for all Irish co-ops.
Read more
Exposed: Revenue’s Kerry co-op project
3,500 Kerry suppliers to get tax bills this year
Fresh €17m tax bills hit Kerry Co-op members
The people at the centre of Kerry shares project
Revenue knew Kerry suppliers were 'broke' as it sent tax claims
The Irish Farmers Journal understands that the Tax Appeals Commission has ruled that patronage shares issued by Kerry Co-op to milk suppliers will not be subject to income tax.
A full ruling on the matter from the Tax Appeals Commission is expected on Monday but early indications suggest farmers have been successful in their appeal case against Revenue.
Kerry milk suppliers were potentially facing an income tax bill in excess of €17m had they not appealed against Revenue.
The ruling is a major vindication for milk suppliers in Kerry who were first targeted by Revenue in 2016. At the time, the Revenue Commission wrote to almost 400 Kerry milk suppliers saying they were liable for income tax on patronage shares received in 2012 and 2013.
Kerry farmers subsequently appealed the decision to the Tax Appeals Commission and would now appear to have been successful in the test case they took against the Revenue.
What are patronage shares?
Patronage shares are free shares distributed to milk suppliers as a loyalty bonus. Kerry Co-op used the scheme until 2013 and farmers routinely declared the shares as capital assets to Revenue, paying taxes on their value when they transferred them through sale or inheritance.
In 2016, Revenue decided that because the shares were linked to the volume of milk supplied, they constituted trading income and were liable to income tax during the year they were received.
Farmers appealed the decision by Revenue arguing that the shares are not income, as they cannot be traded freely against cash. They also challenged the valuation calculated by Revenue.
The result of this test case will also be welcomes by other co-ops as the stance taken by Revenue could also have had far-reaching implications for all Irish co-ops.
Read more
Exposed: Revenue’s Kerry co-op project
3,500 Kerry suppliers to get tax bills this year
Fresh €17m tax bills hit Kerry Co-op members
The people at the centre of Kerry shares project
Revenue knew Kerry suppliers were 'broke' as it sent tax claims
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