In Determination 67TACD2026, issued on 14 April 2026, the Tax Appeals Commission considered whether VAT incurred on the purchase and installation of a six-unit cluster flushing system, a variable speed milk pump and a single-cell heat recovery unit qualified for repayment under the Value-Added Tax (Refund of Tax) (Flat-rate Farmers) Order 2012.
The appellant, a flat-rate dairy farmer, claimed repayment of €1,977 of VAT incurred on the equipment. Revenue refused the claim on the basis that the expenditure was not related to the construction, extension, alteration or reconstruction of a farm building or structure, as required by the 2012 Refund Order.
The appellant submitted that the equipment was integral to the operation of the dairy. The cluster flushing system automated the cleaning of the milking clusters to reduce the spread of mastitis, the variable speed milk pump transferred milk to the bulk tank, and the heat recovery unit generated hot water for cleaning using energy recovered from milk cooling. Evidence was also given that the heat recovery unit was required to satisfy the purchasing requirements of the dairy co-operative.
The Commission upheld Revenue’s decision. It found that the expenditure related to improvements to an existing milking system rather than to works carried out to the dairy building. While the installation altered the operation of the milking equipment, there was no evidence of construction, extension, alteration or reconstruction of the building itself. The statutory requirement in Article 7(a) of the 2012 Refund Order was therefore not satisfied.
In reaching that conclusion, the Commission emphasised that the refund scheme is a statutory tax relief and must be interpreted according to its terms. Referring to Revenue Commissioners v Doorley [1933] IR 750 and Perrigo Pharma International DAC v McNamara [2020] IEHC 552, it stated that entitlement to relief must fall clearly within the wording of the legislation and that any perceived unfairness in the statutory scheme is a matter for the legislature rather than the Commission.
The determination is consistent with 202TACD2025, in which the Commission held that the installation of an automatic calf feeder fixed to the floor of an existing dairy building did not constitute an alteration of the building for the purposes of the same refund scheme.
