Taxes Consolidation Act 1997 section 664A

Relief for increase in carbon tax on farm diesel

Section 664A provides farmers with an additional income tax or corporation tax deduction for the increased cost of farm diesel attributable to increases in the rate of carbon tax from 1 May 2012.

• Farm diesel used in a farming trade is a deductible cost, and the carbon tax included in that cost is part of the deduction; this section gives a further deduction for the amount by which the carbon tax exceeds the rate that applied before 1 May 2012 (€41.30 per 1,000 litres).
• The additional deduction (relevant carbon tax) is calculated as A minus B, where A is the actual carbon tax included in the cost of the diesel and B is the carbon tax that would have applied at the pre-May 2012 rate of €41.30 per 1,000 litres.
• The relief is available to any person carrying on a trade of farming in the State who is entitled to a deduction for farm diesel in computing the profits of that trade; agricultural contractors do not qualify as they do not occupy farmland.
• Farm diesel means marked gas oil used in a farming trade but excludes oil used for home heating; carbon tax means the carbon component of mineral oil tax introduced on 1 May 2010.