Tax Appeals Commission determination 39TACD2023 regarding Income Tax, 2023

Administrative Decision Number39TACD2023
Date23 December 2022
Subject MatterIncome Tax
RespondentThe Revenue Commissioners
The Revenue Commissioners
1. This is an appeal to the Tax Appeals Commission (“the Commission”) pursuant to and in
accordance with the provisions of section 949I of the Taxes Consolidation Act 1997 (“the
TCA 1997”) brought on behalf of (“the Appellant”) against Notices of
Amended Assessment to Income Tax issued by the Revenue Commissioners (“the
Respondent”) for the years 2016 and 2017, in the sum of €30,101 and €30,493
2. The liabilities arose as the Respondent assessed the Appellant as being the recipient of
Farm Payment Entitlements, namely the Basic Payment Scheme entitlements (“BPS”)
paid by the Department of Agriculture, Food and Marine (“DAFM”), and which have not
been included in the Appellant’s income tax returns for the years 2016 and 2017.
3. The core issue in this appeal is whether the BPS entitlements paid by the DFAM, during
the years under appeal, are taxable as income in the hands of the Appellant, as contended
by the Respondent, or are instead taxable as income received by a Company formed,
owned and managed by the Appellant and his brother, namely
(“the Company”), as contended by the Appellant.
4. On 16 December 2021, the Appellant duly appealed to the Commission. The appeal
proceeded by way of a hearing on 6 December 2022. The Appellant was represented by
Tax Advisor and the Respondent was represented by Junior Counsel. The
Appellant gave sworn oral evidence in respect of his appeal and the parties’
representatives made submissions.
5. The Appellant owns lands at , which he previously farmed. In 2005,
the Appellant and his brother decided to carry on the trade of farming through the vehicle
of a limited liability Company and the Company was incorporated, some 17 years ago for
the purpose of farming. Both the Appellant and his brother are Directors of the Company.
The Appellant has a 50% shareholding in the Company.
6. The Appellant contends that since 2005, all farming activities are carried out through the
Company. A Licence is granted by the Appellant to the Company on an annual basis for
the purpose of grazing sheep and cattle only. A copy of said Licence Agreement dated 1
January 2016, is submitted at page 113 of the Respondent’s bundle of documents. It
provides for the number and breakdown of acres that form part of the Licence Agreement
at the cost of €25,000 per year. Further, the terms of the said Licence Agreement set out
inter alia that “the licence includes the right to utilise any basic Payment Scheme
entitlements attached to the said lands”.
7. Teagasc, the Agriculture and Food Development Authority, is the national body providing
integrated research, advisory and training services to the agriculture and food industry and
rural communities. It was established in September 1988 under the Agriculture (Research,
Training and Advice) Act, 19881.
8. Teagasc was engaged on behalf of the Appellant to process and submit the online
application for the BPS entitlements to the DFAM. The application was completed and filed
online by an employee of Teagasc. A copy of said application form for 2016 and 2017 is
submitted in the Respondent’s bundle of documents at page 91 and 98 respectively. The
documents show that the application was submitted in the name of the Appellant and his
brother, as opposed to the Company.
9. Notwithstanding the names on the application form, the DFAM made the BPS entitlement
payments to the bank account of the Company and the Appellant did not receive the BPS
entitlement payments to his bank account, for the years under appeal. A copy of the

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