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Written Answers - Tax Code

Thursday, 9 February 2012

Dáil Éireann Debate
Vol. 755 No. 1

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 36.  Deputy Mary Lou McDonald Information on Mary Lou McDonald Zoom on Mary Lou McDonald  asked the Minister for Agriculture, Food and the Marine Information on Simon Coveney Zoom on Simon Coveney  if he will set up a system whereby farmers could establish a separate bank account for their profits and could pay tax on these profits as they are drawn down in order to provide more financial stability for farmers, as is the system in Australia; and if he will make a statement on the matter. [7076/12]

Minister for Agriculture, Food and the Marine (Deputy Simon Coveney): Information on Simon Coveney Zoom on Simon Coveney Questions relating to taxation are a matter for the Minister for Finance. However tax legislation currently provides a scheme of taxation, known as income averaging, for certain farmers. Under this scheme, eligible farmers can elect to be charged income tax on the average of their farming profits over a three year period, rather than on the basis of their assessed profits over each separate 12-month period.

The scheme allows participating farmers who experience fluctuations in their trading profits to average those profits over three years, thus reducing the effects of those fluctuations on their taxation position.

The Common Agricultural Policy also provides a degree of income stability to Irish farmers, through the system of direct payments, that would not be available in Australia.

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