Value Added Tax Consolidation Act 2010 section 86A

Restriction of flat-rate addition

Section 86A empowers the Minister for Finance to restrict the flat-rate addition by excluding specified supplies of agricultural produce or agricultural services from the scheme where the flat-rate payments systematically exceed the VAT that would otherwise be recoverable.

• The Minister may, following a Revenue review of a particular agricultural sector, make an order excluding specified supplies from the flat-rate addition where flat-rate payments systematically exceed the input VAT that would be recoverable if the farmers were VAT-registered.
• "Non-recoverable tax on input costs" means the VAT that would be deductible under section 59 if the flat-rate farmers were registered for VAT, less any VAT already recoverable under a refund order made under section 103.
• Any order made under this section must be laid before Dáil Éireann and may be annulled by resolution within 21 sitting days.
• The provision targets sectors where the business structures or contractual arrangements between parties result in flat-rate addition payments that consistently overcompensate farmers for their unrecoverable VAT costs.