Tax on horse breeders

Written by Administrator | 28 June 2010

 After the Government has levied a special 4.8% tax on horse breeders for the covering, hiring and supply of horses and greyhounds, the European Commission has never stopped making protests on the decision. The Commission insisted that there is no clearly determined social purpose for the tax breaks and they do not see any benefit to the consumer; this view opposes what the Brussels officials earlier said in support to the Government's lowering of tax rate.
The European Commission has given the Government two months to withdraw the said decision; otherwise they will refer the case to the European Court of Justice in Luxembourg.
Some services charge VAT at 4.8%, 5.2% and 13.5%, but most are charged at 21%. Hiking the VAT rates may affect horse breeders who normally earn hundreds and thousands of euros each time their horse will cover a mare. Top stallions can cover up to 90 mares, earning around €85,000 for their breeders each time.
European Commission issues VAT rate rulings regularly in order to discourage governments' efforts to help industry sectors that may distort the business all over the European Union. The Department of Finance will study the grounds of the objections but will defend the current VAT rates in court.
The leader of the country's Thoroughbred Breeders' Association, Shane O'Dwyer, commented on horse breeding being a vital part of the lives in the Irish communities and thus, they will continue to go against the tax decision.
It looks like not one of the parties is withdrawing their stand on this issue. Whatever happens after the two-month period set by the European Commission for the Government to consider their decision remains to be seen. Horse breeders, both the small and big ones, are surely affected by this condition. In the end, we hope the final decision will be beneficial to most, if not all, parties involved.