Kerry Shares: Farmers who were ‘tax compliant’ won’t get tax bill - Minister
Farmers who were ‘tax compliant and disclosed the value’ of the shares they received will, not be facing any additional income tax, Minister of State, Eoghan Murphy said in the Dail this week.
His comments come in the wake of 400 farmers in County Kerry receiving a letter from the Revenue Commissioners requesting a payment for under-declaration of income based on patronage shares they had received from Kerry Co-op.
The Minister said it is his understanding these shares were received by milk suppliers, as a consequence of and in proportion to, the quantity of milk supplied.
“The shares are, therefore, a payment received by the farmer for their milk supply and form part of the farmer's trading income for the relevant year.
“This is similar to the general tax treatment applying in respect of share-based remuneration for employees other than certain restrictive Revenue-approved share schemes,” he said.
According to the Minister, employees are liable to income tax, USC and PRSI on their share awards for similar reasons, namely, the share award is linked to their work and is, therefore, treated as taxable employment income.
“To apply a different treatment to farmers who receive valuable shares as a result of their ongoing trading relationship with the co-operative would call into question the taxation of all forms of share-based remuneration received by employees or self-employed contractors in other sectors of the economy.”
He added that it must be accepted the patronage shares received by the co-op members are ‘valuable assets’.