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Phosphate regulation dairy cattle: fiscal aspects
The approval of the Senate for the system of phosphate rights means that it is time to examine the tax aspects. Something that is being done in the working group "Fiscal aspects of the phosphate regulation dairy farming". One question that was raised was whether it is possible to write off the rights?
The Agriculture Platform, a consultative body between the Tax Authorities and LTO Nederland, is the driving force behind the working group. The Ministry of Finance, Economic Affairs, LTO and VLB (Association of accountants and tax consultancies) are represented in this. After the first meeting, it appears that there is already agreement on some subjects (consensus), but that there are still just as many questions unanswered (under consideration).
Assessment of rights
Questions to which an unequivocal answer could be given, for example, concerned the assessment of rights. As with pig rights, it is seen as a business asset. The question of when tax should be levied on the compensation for voluntary reduction of milk for 2016/2017 was also discussed.
What the parties also agree on is that no one-off VAT has to be paid on the sale of phosphate rights. In the meantime, FrieslandCampina is responsible for the VAT on the compensation for not delivering milk in 2016.
The compensation from the EU also falls outside the turnover tax. This will also happen for the subsidy stoppers and the liquidity fee. The latter compensation also raised questions about how to deal with a possible loss, because, for example, the rights yield less than 1.200 euros.
What no consensus on?
However, not all questions can be answered yet. For example, there appears to be no agreement on whether the rights can be written off. LTO and VLB are of the opinion that this should become possible. This under the guise of the matching principle. Since Van Dam, outgoing State Secretary for Agriculture, is still going to discuss this subject, the outcome of these consultations is awaited first.
Another interesting question that comes up is what the amount should be called now. This concerns the amount that milk processors withhold if they do not achieve the LU target. Is it a charge or is it a fine? There was no clear answer to that either.
The Phosphate Regulation raises even more questions. Is the subsidy for quitters a compensation for the disposal of a business asset or a compensation for loss of income? At the same time, there are also fiscal bottlenecks when something else takes place on the farm in addition to a dairy sector, such as arable farming. If the dairy sector is discontinued, it will cause problems. This is because the requirement is that the entire company is discontinued.
Another fascinating topic, which crops up in the yard of the stoppers, is: 'What is the value of the company buildings? Are they written down to a lower value or residual value?' Again there is no answer yet.
Still a lot to do
It turns out that a number of important topics still remain unanswered. Especially in the area of stoppers. At the same time, questions about the business transfer are still pending.
View all discussed questions about phosphate rights and tax.
Herman van den Pol
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