17th December

'Commitment' to marine taxation review in Budget 2016 watered down to 'feasibility' asssessment

Addressing a major marine conference last July, Agriculture, Food & Marine Minister, Simon Coveney, said government had begun a process of "radical change" in its approach to marine policy, which would be reinforced by the "first ever review on taxation" to be reflected in the October budget.

Budget 2016 however is short on detail. Instead, Finance Minister Michael Noonan confirmed his officials "would be examining the proposals"...with a view to establishing "the feasibility of their [marine taxation supports] implementation in future Budgets".

seafood

€94m in national co-funding under Budget 2016 will suppport new schemes under the Seafood Development Programme to 2020

Welcoming the publication of the Indecon report on Budget day, Minister Coveney said he looked forward to discussions with Minister Noonan on implementating the recommendations "particularly in relation to the proposed extension of seafarers tax allowances to the fishing industry" and for "appropriate tax treatment to support the fishing vessel decommissioning scheme".

While acknowledging the measures outlined in Budget 2016 for entrepreneurs and small businesses on job creation and exports, especially in rural and coastal areas, IFA Aquaculture executive Richie Flynn also remarked on the 'proposal' to review marine taxation: 

"These are not actual changes to the current regime, but proposals". 

He added that the most important aspect was the extension of Agriculture Relief from CAT to the industry which they had proposed:

"This is being done to encourage orderly succession to the next generation and should be of benefit to a significant number of companies and individuals in the sector."

Under the headling 'Extension to the Fishing Sector of Agriculture Relief from CAT', the Indecon report states:

Agriculture property such as farmland has benefited from specific sectoral tax reliefs since the introduction of CAT in 1975. While all businesses are entitled to business review, the agriculture reliefs provide tailored reliefs which are more beneficial in certain circumstances in respect of both gift tax and inheritance tax.

In order to encourage new entrants to the marine sector and the productive use of marine resources, Indecon recommends that the marine sector should be entitled to similar provisions to agriculture relief.

Under these provisions, qualifying assets such as fishing trawlers and buildings required for fishing or aquaculture would be entitled to relief analogous to agriculture relief, providing the beneficiary satisfies an 80% marine property test on the valuation date, and the beneficiary either meets an actively engaged test or leases the vessels or property to a leasee who meets this text.

All other provisions of the agriculture relief would apply and this relief would apply to fish farms.

Other taxation proposals in the Indecon report propopsed by IFA Aquaculture include:

  • exemption of certain income from leasing of land and privately-owned fisheries for use by commercial fisheries or to assist development of aquaculture/seafood sectors (this may make it easier for members to gain access to land for access to sites or to provide temporary or permanent buildings nearer to roads or other facilities)
  • enchanced marine taxation measures for capital investment in marine energy efficient equipment
  • review of VAT on personal marine safety equipment

Minister for Public Expenditure and Reform, Brenan Howlin, outlined an expected €36m for the Seafood Development Programme. 

"As IFA has pointed out, the capital grant aid portion of this for aquaculture will only be spent if the Minister changes his policy on Section 19 [Renewal of Aquaculture] licences," Flynn told Inshore Ireland.

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