Understanding the VAT Treatment of Broiler Chicken Services: Key Changes Effective September 2025

If you’re involved in broiler chicken farming or providing broiler chicken services, it’s crucial to be aware of recent changes to the Value-Added Tax (VAT) treatment affecting your business from 1st September 2025. This update impacts how VAT is charged, reclaimed, and accounted for in this sector, following the exclusion of broiler chicken services from the flat-rate farmers’ scheme.

What Are Broiler Chicken Services?

Broiler chicken services include the stock minding, rearing, and fattening of chickens specifically for meat production. It does not cover the production of eggs or the farming of other poultry such as turkeys, ducks, or geese. Note that supplying chicks is considered a sale of goods rather than a service.

Major Change: Exclusion from the Flat-Rate Farmers Addition

Until 31st August 2025, farmers providing broiler chicken services could apply the flat-rate farmers addition - a simplified VAT calculation mechanism. From 1st September 2025 onwards, these services are excluded from that scheme. VAT registered broiler chicken farmers must now:

• Charge VAT at the reduced rate of 13.5% on broiler chicken services.
• No longer add the flat-rate addition percentage to invoices.
• Register for VAT if their supplies exceed the €42,500 registration threshold for services or if they voluntarily opt to register.

VAT Registration and Business Structure

• Broiler chicken farmers whose turnover exceeds the VAT registration threshold must register and comply with full VAT obligations, including charging VAT, maintaining records, and filing returns.
• Mixed farming businesses (engaging in broiler chicken services and other farming activities) that register for VAT must charge VAT on all farming supplies.
• In cases where separate legal entities conduct different farming activities (e.g., a company handling broiler chicken services and the farmer retaining other livestock), VAT registration and obligations are assessed separately for each entity.
• Attempts to avoid registration by splitting business activities between connected persons or entities are not permitted under anti-avoidance rules.

Charging VAT on Broiler Chicken Services

VAT must be charged on the total amount payable for the services, excluding VAT itself but including all other fees, charges, and costs. The applicable VAT rate for broiler chicken services is the reduced rate, currently 13.5%. If a broiler chicken farmer also supplies goods like live cattle, those transactions attract VAT at their respective rates, e.g., live cattle at 4.8%.

Reclaiming VAT on Business Expenses

VAT-registered broiler chicken farmers can reclaim VAT paid on purchases used for taxable farming activities, including:

• Electricity and fuel (excluding petrol),
• Veterinary services (excluding oral animal medicines, which are zero-rated),
• Farm vehicles and machinery,
• Agricultural services,
• Accountancy services. They cannot reclaim VAT on purchases made before VAT registration or on non-business use expenditures.