Is our 4.8pc horse sale VAT rate at risk?
Published 29/03/2011 | 05:00
The EU Commission has recently ruled in a case against the Netherlands in relation to the application of a reduced VAT rate to the sale of horses.
The European Court of Justice (ECJ) held that, by applying a reduced rate of VAT to the supply of horses which are not intended for the use in the preparation of food stuffs, the Netherlands was not fulfilling its VAT obligations under EU law.
In November last year, the European Commission decided to bring the same case against Ireland in the ECJ regarding the reduced Irish VAT rate of 4.8pc charged on the sale of horses.
The Department of Finance has said that it intends to defend Ireland's position against the Commission's action.
However, the ruling against the Netherlands provides a strong precedent and it now looks increasingly likely that Irish farmers involved in the sale of horses will be forced to charge higher VAT rates in the future.
However, there appears to be no imminent threat to the reduced rates that apply to farming in general at the moment.