Dairy Farmer Loses VAT Appeal Over Robotic Milking Equipment

Tax ruling on milking equipment

The dispute concerned a repayment application made by a flat-rate dairy farmer who is not registered for VAT. The farmer sought reimbursement for VAT paid on collar weights, a controller, collars, HR LDN tags and slide tags bought alongside an Astronaut A5 robotic milking machine.

The Revenue Commissioners refused the claim in January 2025. The amount in dispute was €4,970. The application was made under a 2021 Government Refund Order, which permits flat-rate farmers to seek repayment of VAT on specified categories of expenditure.

At the Tax Appeals Commission, the farmer said the project was a new build and that the robotic milkers could not operate without the collars. “This is a complete new build and the robotic milkers are new,” he told the commission. “The milkers cannot function without the collars, they are an essential part of the whole robotic system.”

The farmer argued that the disputed items should qualify because VAT on the purchase and installation of the robotic milking machine had already been repaid. He said the collars were not optional additions when bought as part of the wider system, while accepting that VAT on collars purchased separately would not be refundable.

Revenue’s counsel argued that the expenditure did not relate to the construction, extension, alteration or reconstruction of a farm building or structure. The items were described as equipment for the farmer’s cattle. The ruling is the third issued by the commission in recent months involving unsuccessful farmer claims connected with milking equipment.

Appeals Commissioner Conor O’Higgins found that the items, taken together as a digital cow collar, did not form one composite supply with the robotic milking machine. He said they were not “neither physically nor economically separable from the overall supply”, as had been stated by the supplier in correspondence submitted with the appeal. Instead, the commissioner classified the transaction as a multiple supply comprising separate individual supplies made at the same time. He also found that the farmer had not established a sufficient connection between the disputed purchases and the construction expenditure for which VAT had been repaid. The appeal therefore failed, and the Revenue determination remained in force.