TaxSource Total

Here you can access relevant source documents which support the summaries of key tax developments in Ireland, the UK and internationally

Source documents include:

  • Chartered Accountants Ireland’s representations and submissions
  • published documents by the Irish Revenue, UK HMRC, EU Commission and OECD
  • other government documents

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Summary Guide to Proposed Legislative Changes Showing the Implications of the Interaction of the Various (VAT) Changes Made

(1) The rate of 4.8% will only apply to the supply of livestock, as defined. Accordingly the 4.8% rate will continue to apply to livestock being

  • cattle,
  • sheep,
  • goats,
  • pigs,
  • deer and
  • those horses intended for use in the preparation of foodstuffs or in agricultural production.

(2) The rate of 4.8% will no longer apply to supplies of

  • horses not intended for use in the preparation of foodstuffs or in agricultural production
  • live greyhounds and
  • the hire of horses.

The 9% rate will apply to these supplies from 1 May 2014.

(3) The 13.5% rate will apply from 1 May 2014 to supplies of all animal insemination services, including livestock, greyhound and horses, whether normally intended for use in the preparation of foodstuffs or in agricultural production, or not. Most of these insemination services already currently apply at the 13.5% rate. Livestock and horse semen will also continue to apply at the 13.5% rate.

Q: Can you clarify what the phrase “for use in agricultural production” means in this context please?

A: Following the introduction of the new legislation, the Revenue Commissioners will produce a leaflet which will provide clarification on how the new arrangements will apply particularly in respect of horses intended for use as foodstuffs and for use in agricultural production, to which the 4.8% VAT rate will continue to apply. The delayed introduction of the new VAT treatment will facilitate a proper consultation between Revenue and the industry concerned in relation to this leaflet. It is intended to introduce the legislation by way of commencement order with effect from 1 May 2014.

Q: Thoroughbred horse breeders sell their stock at varying ages – they can be sold as mares carrying foals in the womb, as foals, as yearlings and as ready-to-race two-year-olds. Other unraced and untried horses are sold at three and four years. Will there be different VAT rates for any of these distinct markets?

A: Generally speaking there should be no distinction and the 9% rate will apply as thoroughbred horses are not usually bred for use in agricultural production or as foodstuffs. If necessary, the Revenue Commissioners will address this point in their leaflet.

Q: Will there be a distinction between those buying a horse to trade and end-users? Traders are bloodstock dealers who buy horses with the intention to sell again. They are likely to register for VAT. But end-users (racehorse owners) are usually private individuals and not VAT registered.

A: There should be no distinction in VAT rates charged by a VAT registered trader to a business or an end consumer. In the case of registered farmers the sale of horses will attract a rate of either 4.8% where the horse is intended for use in food or in agricultural production or 9% in all other circumstances. However, if the supply is made by a flat-rate farmer, he/she will charge the bloodstock agent (if registered for VAT) the flat-rate addition which will be 5% with effect from 1 January 2014. A supply by a flat-rate farmer to a private individual or to another flat-rate farmer is not subject to VAT.

The VAT rate increase should not impact on sales of thoroughbred horses to the UK horse buyers, as they are generally registered for VAT, and intra-Community supplies of goods to taxable persons are zero-rated, and accounted for by the registered person in the other Member States.

Q: The Finance Bill states that “a reduced rate of 13.5 per cent is chargeable on supplies of insemination services for horses and greyhounds.” Does this apply to all stud fees or just those covered by artificial insemination.

A: The rate of VAT applying to all insemination services, which includes services both natural and artificial as well as nominations carried out on a “no foal no fee” basis or “litter guaranteed” basis in the case of greyhounds, will be liable to VAT at 13.5% if provided or received within the State. This is consistent with the existing VAT rate applicable to other animal insemination services.

Source: Department of Finance and Revenue Commissioners. Copyright Acknowledged.