Farmer’s Flat Rate compensation
The farmer’s flat rate payment for farmers who elect not to register for VAT will be increased to 4.8% from 1 January 2027.
The scheme is designed to compensate farmers for any VAT liability incurred on their agricultural inputs while removing the administrative burden of registering for VAT in order to reclaim it. The percentage refund is calculated using macroeconomic data, provided by the CSO to Revenue, averaged over three full financial years based on agricultural inputs and outputs and is reviewed every year.
Accelerated Capital Allowances for Farm Safety Equipment
The Accelerated Capital Allowances (ACA) scheme for farm safety equipment (which includes adaptive equipment for disabled farmers) will be extended by three years to end 2029.
Having last been updated in Finance Act 2024, this Bill provides for the addition of twelve further items to the range of equipment covered by this ACA, bringing the total to 31.
Succession Farm Partnerships
The tax credit for succession farm partnerships is an Income Tax incentive designed to encourage farmers to transfer the farm business to their identified farming successor(s) in a planned and timely manner. The tax credit for registered farm partnerships that are registered on the succession farm partnership register on or after 1 January 2027 will be increased from €5,000 to €10,000 per annum (available for up to 5 years).
In furtherance of a recommendation made in the report of the Commission on Generational Renewal in Farming, the minimum three-year holding period before which assets can be transferred under the scheme's rules will be removed for applications made to enter a Succession Farm Partnership on or after 1 January 2027.
VAT on Non-Oral Respiratory Vaccines for Livestock
Ireland currently avails of applying the zero-rate of VAT to medicines consumed by livestock orally while a 23% rate applies to non-oral medicines for livestock. The VAT rate for non-oral respiratory vaccines will be reduced to 9% from 1 January 2027.