285D Acceleration of wear and tear allowances for farm safety equipment

Summary

This section provides for a scheme of accelerated wear and tear allowances for expenditure incurred by farmers on farm safety equipment. The scheme is available to persons carrying on a trade of farming that incur capital expenditure on certain items of farm equipment between 1 January 2021 and 31 December 2023 for the purposes of the farming trade. The scheme is subject to an overall annual budget of €5 million. An initial application to the Department of Agriculture, Food and the Marine for certification will be required. Where expenditure is certified, the person will be entitled to claim wear and tear allowances on the expenditure over a period of 2 instead of 8 years, subject to a maximum tax benefit of €500,000 per undertaking.

Details

Definitions

(1) “farming” has the same meaning as it has in Part 23, other than in section 664, which is farming farm land, that is, land in the State wholly or mainly occupied for the purposes of husbandry, other than market garden land;

“eligible person” means a person carrying on farming, the profits or gains of which are chargeable to tax in accordance with section 655¹;

“Minister” means the Minister for Agriculture, Food and the Marine;

“qualifying certificate” means a certificate issued under subsection (4);

“qualifying equipment” means equipment of a type specified in Schedule 35;

“qualifying expenditure”, in relation to an item of qualifying equipment (i.e. equipment of a type specified in Schedule 35), means the amount which, in the reasonable opinion of the Minister Agriculture, Food and the Marine, is an appropriate purchase price;

“relevant tax” means corporation tax where the eligible person is a company and income tax, USC and PRSI where the eligible person is an individual;

“Rescuing and Restructuring Guidelines” means the Communication of the Commission on Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty²;

“SME” has the same meaning as it has in Commission Regulation (EU) No 702/2014 of 25 June 2014³;

“Tax reference number” has the same meaning as it has in section 891B(1). In the case of an individual, this means the individual’s PPS number or in any other case, the reference number stated on any return of income form or notice of assessment issued by the Revenue Commissioners;

“undertaking” means the relevant economic unit that would be regarded as an undertaking for the purposes of the Rescuing and Restructuring Guidelines (i.e. the Communication of the Commission on Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty⁴);

“undertaking in difficulty” is to be interpreted in accordance with section 2.2 of the Rescuing and Restructuring Guidelines (i.e. the Communication of the Commission on Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty⁵).

(2) Where a person acquires qualifying equipment, the person may apply to the Minister for Agriculture, Food and the Marine for a qualifying certificate in respect of that equipment.

(3) Where a person applies to the Minister for Agriculture, Food and the Marine for a qualifying certificate under subsection (2), the person is required to use the form provided by the Minister and include the following information:

 (a) in respect of each item of qualifying equipment which the application relates to, a description of the equipment and its purchase price,

 (b) the name and address of the applicant,

 (ba) the tax reference number of the applicant and

 (c) any other information, which will be specified in the application form, which the Minister considers necessary and appropriate for the purposes of determining (i) whether a certificate should be issued under subsection (4) and (ii) the qualifying expenditure in respect of an item of qualifying equipment.

(4) Where a person makes an application to the Minister under subsection (2), the Minister will issue a certificate to the person if:

• the Minister is satisfied that the equipment is qualifying equipment, and
• subsection (5) does not apply in respect of the equipment.

(5) This subsection will apply where, on the date an application is made under subsection (2) in respect of qualifying equipment, the qualifying expenditure for that equipment exceeds an amount determined by the formula:

€5,000,000 – M

“M” = an amount which is equal to the aggregate qualifying expenditure (exclusive of VAT) in respect of which:

• qualifying certificates have already been issued in the year to date, and
• qualifying certificates would be issued, if appeals of decisions (see section 285D(9)) in respect of applications already made under subsection (2) in the year to date were successful.

(6) A qualifying certificate will include the following information:

 (a) in respect of each item of qualifying equipment which the certificate relates to, a description of the equipment and the qualifying expenditure,

 (b) a unique sequential certificate identification number,

 (c) the name and address of the person the certificate is issued to,

 (ca) the tax reference number of the person the certificate is issued to and

 (d) any other information the Minister for Agriculture, Food and the Marine or the Revenue Commissioners consider necessary and appropriate.

(7) The Minister for Agriculture, Food and the Marine is required to provide to the Revenue Commissioners, by 28 February each year, details of all qualifying certificates issued, and all qualifying certificates deemed to be cancelled under Section 13A during the preceding year, which is to include the information set out in subsection (6).

(8) Where an application is made by a person under subsection (2) and the Minister Agriculture, Food and the Marine decides:

• not to issue a qualifying certificate, or
• to issue a qualifying certificate for less than the amount that was applied for
• the Minister is required to notify the person of that decision.

(9) Where the Minister for Agriculture, Food and the Marine is required to notify a person of a decision in accordance with subsection (8), the notification is required to include the reasons for the decision and inform the person that:

• within 21 days of the date of the notification, the person may appeal the decision by submitting a notice of appeal (which specifies the grounds for the appeal), to the appeals officer (within the meaning of section 667G⁶) and
• the decision will be suspended until either the decision becomes final under subsection (12) or an appeal made under this section is disposed of.

(10) A notice of appeal must be accompanied by a fee, which will be determined by the Minister for Agriculture, Food and the Marine.

(11) Where the Minister for Agriculture, Food and the Marine makes a decision in accordance with subsection (8), the decision will be suspended until either:

• where subsection (12) applies (i.e. an appeal is not made within the period of 21 days beginning on the date of a notification under subsection (8)), the decision becomes final under that subsection, or
• where subsection (12) does not apply (i.e. an appeal is made within the period of 21 days beginning on the date of a notification under subsection (8)), the disposal of the appeal of that decision.

(12) Where an appeal of a decision made by the Minister for Agriculture, Food and the Marine is not made within the period of 21 days beginning on the date of a notification of that decision under subsection (8), the decision will become final.

(13) Where a decision is appealed under this section, subsections (5) to (10) of section 667G⁷ will apply as they apply to an appeal under that section.

(13A) Where two or more qualifying certificates are issued in respect of an item of qualifying equipment then only the certificate issued in respect of the first application made by the person shall be treated as a qualifying certificate for the purposes of the section. Any other certificate standing issued to that person in respect of that same item of qualifying equipment is deemed to be cancelled in so far as it relates to that item of qualifying equipment and shall not be treated as a qualifying certificate for the purposes of the section.

(14) Where an eligible person incurs, between 1 January 2021 and 31 December 2023, capital expenditure on qualifying equipment for the purposes of the farming trade and has been issued with a qualifying certificate in respect of that equipment, then for any chargeable period a wear and tear allowance is to be made under section 284 in respect of any qualifying expenditure specified in that qualifying certificate, section 284(2) will apply as if the reference in section 284(2)(ad) to 12.5% were a reference to 50%.

(15) Subsection (14) will not apply where the eligible person is any of the following:

• an undertaking in difficulty (which term is to be interpreted in accordance with section 2.2 of the Rescuing and Restructuring Guidelines (i.e. the Communication of the Commission on Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty),
• part of an undertaking part of which is subject to an outstanding recovery order following a previous decision of the Commission of the European Union that declared an aid illegal and incompatible with the internal market, or
• part of an undertaking that is not an SME.

(16) The aggregate amount of relief (see subsection (19) for the calculation of relief) granted to a person under this section shall not exceed €500,000.

(17) This subsection will apply to a person for a chargeable period where the aggregate of the amount of the relief (see subsection (19) for the calculation of relief) granted to the person in that chargeable period and in any previous chargeable periods exceeds than €60,000.

(18) Where subsection (17) applies to a person for a chargeable period, then, notwithstanding section 851A (which provides for the confidentiality of taxpayer information), the Revenue Commissioners may disclose the following information in respect of the year in which the chargeable period ends:

• the name of the person,
• the sector of activity at NACE group level,
• the territorial unit, within the meaning of the NUTS Level 2 classification specified in Annex 1 to Regulation (EC) No 1059/2003 (as amended), in which the person is located, and
• the year in which the relief is granted.

For the purpose of subsections (16) and (17), the amount of relief granted to a person in a chargeable period will be calculated using the formula:

R = A – B

“R” = the amount of the relief granted to the person in the chargeable period,

“A” = the amount of relevant tax that would be payable by the eligible person for the chargeable period, but for subsection (14), and

“B” = the amount of relevant tax payable by the eligible person for that chargeable period.

Relevant Date: Finance Act 2021