The Irish Farmers' Association - IFA

Lobbying Organisation The Irish Farmers' Association - IFA

Date published 20 Sep, 2020

Relevant Matter Matters involving public funds

Public Policy Area Finance

Period 1 May, 2020 to 31 Aug, 2020

Specific Details IFA 2021 Budget Submission - Taxation Measures to Support Growth & Restructuring

Intended results Farm Transfer, Succession and Partnerships - that Agriculture must be removed from the commercial definition and revised in line with the residential stamp duty charge of 1%, up to €1m, and 2% thereafter. Reliefs for Stamp Duty - The rollover of consanguinity relief post 2020 remains vital for farm transfer and planning. - The extension of consolidation relief post 2020 is critical to incentivise farmers to reduce the number of parcels of land in their farm or to decrease the distance between them, with the net result of making their farm businesses more efficient and profitable. - Young Trained Farmers Relief must be retained. However, the age requirement of 35 years should be moved in line with the Department of Agriculture's Young Trained Farmer age maximum of 40 years and Revenue's age eligibility condition of the tax credit for succession farm partnerships, which is also up to 40 years. - Reviews to Stamp Duty reliefs should be announced before Budget day in October. Adeequate timing should be provided for in the year it is due for renewal, to support smooth transfer. Ceiling for Young Trained Farmer Stamp Duty Relief - Young Trained Farmer Stamp Duty Relief should be fully removed from State Aid or the ceiling be increased, to allow for greater land mobility, encourage land transfer and develop economically viable farm units. Agricultural/Business Relief & Capital Acquisitions Tax (CAT) Values - The retention of 90% Agricultural is critical to support the transfer of economically viable family farms. The Association also supports the commitment in the Programme for Government to increase the Category A threshold (parent and child) from the current rate of €335,000 to €500,000 in future budgets. - Due to changing demographics and family structures, the Favourite Nephew or Niece Relief should be extended to a Favourite Successor Relief, allowing the farm to be gifted to someone who would be in a better position to continue farming the land. The movement from category B/C threshold to Category A would allow for less of a tax liability, protecting the sustainability of the farm and promote land mobility. Collaborative Farming Partnership Fund - The extension post 2021 of this essential grant, which is diminishing. CGT Entrepreneur Relief - If a landowner wishes to sell land to a long-term tenant, then the CGT Entrepreneur relief of 10% will apply to incentivise supporting the genuine farmer and giving the long-term tenant preferred status. -The lifetime limit of €1m on the CGT Entrepreneur Relief should be increased in Budget 2021. The enhancement of CGT Entrepreneur Relief is an important measure to encourage risk-taking and investment, and the subsequent disposal of business assets during an individual's lifetime. - Agricultural land that is subject to CPG should not be categorised as 'development' land and will still qualify for CGT Entrepreneur Relief. Interaction of CGT Entrepreneur Relief & CGT Retirement Relief - The interaction between the two CGT reliefs should be removed, and that the two reliefs should be standalone. An individual should be able to avail, in full, of the CGT Entrepreneur Relief and The CGT Retirement Relief over the course of their lifetime, subject to satisfying the qualifying conditions of each relief. Agricultural Relief - Removal of Individual Qualifying Criteria - To encourage the transfer of a family farm into joing ownership at the time of inter-generational transfer, IFA believes that 90% Agricultural Relief should apply where the farm is transferred into joint names, and where the 80% asset test and the active farming requirement is satisfied by either of the spouses. Forestry & CAT / Stamp Duty Reliefs - If any percentage of the farm is dedicatd to farm forestry, it should be defined as agriculture land and the CAT Agricultural Relief applied to the whole farm. - Farm forestry is treated in a similar manner in relation to the consanguinity and Young Trained Farmers Stam Duty Reliefs as it is with CAT Agricultural Relief, where it is defined as agriultural land. - Where a non-farmer buys forestry, that the rate of stamp duty at normal commercial rates apply to the full value of land and timber. This is to ensure forestry remains primarily with persons who are genuine farmers. Extending 10-year Ownership and usage Period for CGT Retirement Relief to Spouse for Lifetime Transfers. - Where a farmer has owned and used an asset for 10 years and the asset is transferred into joint names, the transferee spouse should inherit the same time ownership and usage status. Income Volatility Income Averaging 'Step-Out' flexibility - A farmer should be allowed to 'step-out' of income averaging more than once in a five-year period, where they are not carrying an unpaid deferred tax amount from a previous 'step-out', providing a strong incentive to repay the deferred tax also. For example, if the farmer 'steps out' from income averaging in Year 1 and repays the deferred amount in Years 2 and 3, they should be eligible to 'step-out' again in Years 4 or 5 of a cycle. Agricultural Rainy-Day Fund - The introduction of an agricultural Rainy-Day Fund, which allows all farmers to put aside a small percentage of their gross receipts, whether in their co-op, specially assigned bank account or State Farm Volatility Fund, which could be used by the NTMA. This will create a buffer and ensure the long-term sustainability of the sector, which is very volatile. cont'd This money is then available for draw down within the next 5 years, and the tax due would be paid on the year of withdrawal, similar to how companies are allowed to offset their losses to protet the viability of the business by carrying it back from a loss making year to a profit making year. Removing Discrimination in the Tax System - The commitment in the Programme for Government Our Shared Future to increase the Earned Income Tax Credit to €1,650 for the self-employed, to match the PAYE credit must be implemented in full in Budget 2021. The gap of €150 from the current level of €1,500, must increase to €1,650. Universal Social Charge (USC) for the Self-Employed - The discriminatino of the application of the USC between PAYE and self-employed earners must be removed, aligning the self-employed with PAYE workers. Vaccines and Herd Health Products - The Government apply 0% VAT rate on non-oral animal medicines and vaccines. Tax Treatment of Payments Received for Use of Forestry Land by a Third Party - Payment for the loss of this income i.e. forestry premium, should not be subject to Income Tax or Capital Gains Tax. Carbon Tax Exemption on Agricultural Diesel & Other Agri-Fuels - As there is no viable alaternative to using agri-diesel and other agri-fuels, the application of the carbon tax cannot incentivise behavioural change, therefore they should be exempted from the Carbon Tax. CGT / CAT Reliefs - Solar Leases - That the legislation is amended to give greater clarity and avoid the uncertainty that is impeding solar panel projets on farms. The calculations used to determine the area of land on which solar panels are installed, should only include the footprint of the structures mounting solar panels, ancillary equipment and service roadways (i.e. areas not capable of being grazed). cont'd The calculations should exclude any area capable of being grazed by agricultural livestock either under, around or in between panels, Green Tax Credit - To ensure the advancement of farm scale renewable infrastructure 1/ a generation feed-in tariff must be introduced for farm-scale renewable energy prodution, in particular solar, wind and anaerobic digestion and 2/ Income received for the alternative use of farmland for renewable energy projects should receive an income tax exemption, if such income is used for the purposes of re-investment in the farm business. Accelerated Capital Allowances for Emission Efficient Equipment - Farm equipment, which contributes to increased emission efficiency, such as LESS or capital investment in developing bioeconomy supply chains, must qualify for accelerated capital allowances. This would be provided through an enhanced SEAI Accelerated Capital Allowance scheme, or through a parallel scheme, which would operate under the same structures i.e. 100% capital allowances for investment in equipment that is independently certified and listed by a qualifying authority. Farm Safety Incentive and Employee Flat-Rate Expenses - Non-registered farmers may reclaim VAT on costs for purchasing and maintaining farm safety equipment to help maintain best safety standards, via the VAT 58 form. - Agricultural workers be included as par of the current review of the flat-rate expenses, in line with similar employees in the sector, a rate of €651.70 is estimated. Carbon Tax Relief - Glasshouse growers of food crops using CO2 enrichment, should be granted a Carbon Tax relief/rebate. Exise Duty on Fuel - that the current rates on fuel and diesel remain unchanged. Sugar Sweetened Drinks Tax (SSDT) and Healthy Eating - The €35m revenue generated from the sugar tax on sweetened drinks, should be directed towards the promotion of the consumption of fresh and healthy Irish produce.

Name of person primarily responsible for lobbying on this activity Tim Cullinan, IFA President. Rose Mary McDonagh, IFA Farm Business Chair

Did any Designated Public Official(DPO) or former Designated Public Official(DPO) carry out lobbying activities on your behalf in relation to this return? You must include yourself, and answer Yes, if you are a current DPO or a DPO at any time in the past. (What is a Designated Public Official?) No

Did you manage or direct a grassroots campaign? Yes

What is the directive you gave to the grassroots campaigners? To lobby all Oireachtas members regarding IFA 2021 Budget Submission - Taxation Measures to Support Growth & Restructuring

Was this lobbying done on behalf of a client? No

Mass communications

Letter All TDs

Submission All TDs

Letter All Senators

Submission All Senators

Letter All MEPs

Submission All MEPs

Lobbying activity

The following activities occurred for this specific Subject Matter Area.

Meeting (2-5)

Phone call (2-5)

Informal communication (2-5)

Email (2-5)

Letter (2-5)

Designated public officials lobbied

The following DPOs were lobbied during this return period on this specific Subject Matter Area. These DPOs were involved in at least one of the Lobbying Activities listed above, but not necessarily all of them. As returns are specific to a Subject Matter Area the above Lobbying Activities may be associated with multiple returns.

Micheál Martin Taoiseach (Dáil Éireann, the Oireachtas)

Brendan Gleeson Secretary General (Department of Agriculture, Food and the Marine)

Sinead McPhillips Assistant Secretary (Department of Agriculture, Food and the Marine)

Paul Dillon Assistant Secretary (Department of Agriculture, Food and the Marine)

Paul Savage Assistant Secretary (Department of Agriculture, Food and the Marine)

Matt Carthy TD (Dáil Éireann, the Oireachtas)

Niall Collins Minister of State (Department of Education and Skills)

Damien English TD (Dáil Éireann, the Oireachtas)

Roderic O'Gorman Minister (Department of Children, Equality, Disability, Integration and Youth)

Ciarán Cuffe MEP (European Parliament)

Eamon Ryan Minister (Department of Climate Action, Communication Networks and Transport)

Norma Foley Minister (Department of Education and Skills)

Charlie McConalogue Minister (Department of Agriculture, Food and the Marine)

Aisling Dolan Senator (Seanad)

Heather Humphreys Minister (Department of Social Protection)

Leo Varadkar Minister (Department of Enterprise, Trade and Employment)

Michael Healy-Rae TD (Dáil Éireann, the Oireachtas)

Mattie McGrath TD (Dáil Éireann, the Oireachtas)

Michael Ring TD (Dáil Éireann, the Oireachtas)

Anne Rabbitte Minister of State (Department of Health)

Niall Collins Minister of State (Department of Further and Higher Education, Innovation and Science)

Helen McEntee Minister (Department of Justice)

Frank Feighan Minister of State (Department of Health)

Dara Calleary Minister (Department of Agriculture and the Marine)

Barry Cowen Minister (Department of Agriculture and the Marine)