The Joint Oireachtas Committee on Agriculture has refused to accept an answer from Revenue that it did not change its interpretation of VAT rebate for farmers.

Chair of the committee Jackie Cahill TD asked it to be put on the record that the committee unanimously did not accept Revenue’s position on VAT reclaims for non-VAT registered farmers.

“We’re refusing to accept your answer that there wasn’t a change in the interpretation,” Cahill said.

Despite the question being asked by several committee members and examples being given of items that were previously eligible for VAT reclaim that now are not, Revenue officials remained steadfast that it did not change its interpretation.

Revenue official Chad Egan said he did not believe there was a change.

Refund order

“I am responsible for interpreting the refund order and I would know. I would have issued an instruction and that would have been published if there was any such change. So I am very happy to say there isn’t.

“From our statistics generated, I think 96% of claims have been approved over the last three years. Our approval rate has been quite consistent, our rejection rate has been quite consistent as well,” he added.

Senator Paul Daly said that while statistically things might be the same, if there wasn’t a change, they “wouldn’t be here”.

“We never once got representation from a farmer about VAT reclaims up to last July, August, September – whenever it started.

“The legislation didn’t change and the guidelines you work by didn’t change, but, in my opinion, your interpretation changed. That’s what’s causing the problem."

Splitting hairs

“We’re literally splitting hairs here in your interpretation. In my opinion, a milk tank is a milk tank, whether you build it into a new shed or you put it into an old shed.

“We’re actually splitting hairs. In my opinion, it seems to be get the farmer at all costs,” he said.

Daly repeatedly asked why the VAT could be reclaimed on a bulk tank that was put into an existing farm building in 2021, but it was now ineligible.

Egan said that in 2021 “the item was probably refunded and it shouldn’t have been”.

Small farmers

Michael Fitzmaurice TD said many of the eligibility criterion, including that a meal bin must be over 10t, is prohibitive to small farmers.

“What you’re basically doing is disproportionately discriminating against a small farmer.

“Is it ranchers you’re trying to promote at a 10t bin?” he added.

Fitzmaurice also urged the Revenue officials to visit a farm, to which Egan responded he was this Thursday.

Other members of the committee said allowing a VAT reclaim on hydraulic scrapers and not robot scrapers is not promoting farm safety and preventing modernisation.

Senator Tim Lombard gave an example of a 3.5t meal bin he reclaimed VAT on in 2002, which is now ineligible.


Revenue officials provided some clarity at the committee on what items are currently eligible and ineligible for VAT reclaim by non-VAT registered farmers.

Revenue said it will publish definitive guidance this month.

Egan said farm equipment is not eligible under the order allowing these reclaims, but it may be when it is a “fixture”.

“A fixture is an item that is permanently installed in the farm building and once installed cannot be removed without causing significant damage or destruction to the farm building or fixture,” he said.

Bulk tanks are only eligible if they are part of a new build and meal bins if they are over 10t. Both of these items, Revenue said, are under review and a final answer on these will be published in the upcoming guidance.

Other eligible claims include plumbed water troughs, cubicle mats bolted to the floor, drafting gates and new-build parlours.

Slurry bags are ineligible as they are considered to be mobile.

Heat detection and health monitoring systems, as well as automatic calf feeders, are also ineligible.

Hydraulic scrapers are allowed, while robot scrapers are not.

Historic derogation

This VAT rebate offered to non-VAT registered farmers is a historic derogation that has been in place since 1972.

In the latter half of 2023, farmers began to report that items which were previously eligible for VAT reclaim under this order were being refused.

The committee heard 86% of farmers are non-VAT registered.