The Government is unable to reduce the rate of VAT applicable to low-emission slurry spreading (LESS) equipment below the 23% rate applied to farm machinery, as Irish VAT rules must comply with the EU's VAT Directive, the Minister for Agriculture Charlie McConalogue has clarified.

“I am advised by Revenue that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply,” wrote Minister McConalogue, replying to a question by Carol Nolan TD.

“In accordance with Irish legislation, agricultural equipment is liable to VAT at the standard rate, currently 23%.

“There is no discretion under the directive for Ireland to reduce the rate of VAT on these goods,” he explained.


Nolan said that farmers would be disappointed with the reply, as the issue of VAT on LESS equipment had been one raised frequently by farm organisations over recent months.

“I am aware that there will be disappointment following the minister’s reply, as this is an issue that farmer representative bodies have been calling for, for some time,” Nolan said.

“I do accept, however, that there are beneficial arrangements that can be entered into to offset the challenges presented by the VAT issues that arise.

“But having said that, the clear sense I am getting from farmers is one of genuine frustration at the fact that Ireland does not appear able to sneeze unless it is permitted to do so in an EU Directive of one kind or another,” the Offaly TD added.

VAT registered v Flat-Rate Farmers Scheme

Minister McConalogue reminded farmers that those who had registered VAT could claim back the VAT charged on farm machinery.

“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 such as slurry equipment,” he said.

“Farmers who are not registered for VAT are entitled to avail of the Flat-Rate Farmers Scheme, which compensates them for the VAT incurred on goods and services used in the course of their farming business by allowing them to charge a flat rate addition for their supplies of agricultural produce and services.

“This long-standing arrangement is provided for under Ireland’s VAT legislation and is permitted under the directive,” the minister explained.