I am informed by the Revenue Commissioners that, based on figures published by the Department of Agriculture, Food and Forestry, subsidies received by farmers as income subsidies in the years 1994 and 1995 were as per the following schedule.
Income tax statistics do not distinguish between the amounts of tax that arise from farm subsidies and from other sources. I am informed by the Revenue Commissioners that to provide the breakdown required would necessitate a detailed examination of all the returns received from farmers. Such an examination could only be carried out at a disproportionate cost.
The general position is as follows. First, where a payment is made to a farmer in circumstances where it is intended to be a subsidy towards income, it will generally be taxible as income. Second, where the payment made is intended to be an amount to aid the purchase of a capital item, it will generally reduce the cost of the item for capital gains tax purposes and for capital allowances purposes, if appropriate. Third, payments made for the forfeiture or surrender of rights will generally be liable to capital gains tax. Fourth, certain payments made may be income payments but are exempted by virtue of certain provisions in the Income Tax Acts, e.g. forestry premia may be exempted under section 18 of the Finance Act, 1969.