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VAT for Farmers

An Individual who engages in agricultural production, and whose turnover from non-agricultural activities does not exceed the appropriate annual threshold, is a flat-rate farmer i.e. a farmer who is not obliged to register for VAT in respect of his or her farming activities.

Obligation to register

A farmer is obliged to register where they derive a certain amount of income from carrying out other activities such as:

  • A Farmer whose annual turnover from agricultural contracting activities exceeds or is likely to exceed €37,500.
  • A Farmer whose annual turnover from sales of bovine semen exceeds or is likely to exceed €75,000.
  • A Farmer whose annual turnover from retail sales of horticultural products exceeds or is likely to exceed €75,000.
  • A Farmer who is receipt of Fourth Schedule services from abroad.
  • A Farmer whose annual turnover from intra-Community acquisitions exceeds or is likely to exceed €41,000.

Flat-rate farmers

A flat-rate farmer is a farmer who is not registered for VAT in respect of their farming activities. In order to compensate for VAT paid on supplies to them, such a farmer is entitled to a flat-rate addition (at present 5.2%) to the prices at which their agricultural produce or agricultural services are supplied to VAT-registered persons including marts, agricultural co-operatives and meat factories.

VAT Reclaim by Flat Rate Farmers

Farmers who are not registered for VAT may reclaim VAT paid by them in relation to the construction, extension, alteration or reconstruction of farm buildings and structures or on land drainage and land reclamation. Claims for such repayment should be made on Form VAT 58. Such reclaims can be made for all VAT on such expenditure within the past four years. Applications for repayment must be submitted within four years from the end of the taxable period to which the claim relates.