Dairy farmer loses VAT appeal on robotic milking equipment

A dairy farmer has lost an appeal to reclaim VAT from the Revenue Commissioners over the purchase of what the farmer described as essential equipment for the functioning of a robotic milking machine.

In January 2025, the Revenue Commissioners refused the dairy farmer’s claim for the repayment of almost €4,700 in VAT for the purchase of the items in question.

The items which the farmer sought VAT repayments on included cow collars, collar weights, HR-LDn transponders, controllers and side tags, which he described as essential accompanying components of the Lely Astronaut A5 robotic milking machine.

In the appeal to the Tax Appeals Commission (TAC), the dairy farmer said that the robotic milking machine would not function without the cow collars and other supporting equipment.

“This is a complete new build and the robotic milkers are new. The milkers cannot function without the collars, they are an essential part of the whole robotic system,” he said.

The farmer said purchasing the robotic milking machine without the cow collars would be like “buying a car without wheels” and he said that the cow collars were “part of the robot”.

‘Not an optional extra’

“I can understand why VAT is non-refundable for collars purchased in isolation, but these are not an optional extra.”

In the submission, the farmer stated that the VAT claim for the named items should be permitted as they would be for purchase and installation of the robotic milking machine.

The farmer is not registered for VAT, but was claiming the VAT back on a Government 2021 refund order which allows flat-rate farmers who incur VAT to claim repayments on specific kinds of expenditure.

However, the TAC refused to approve the appeal, as counsel for the Revenue said that the VAT for these items was unrelated to the construction, extension, alteration or reconstruction of a farm building or structure.

The Revenue barrister said that the concerned equipment was instead related to the farmer’s cattle.

The appeals commissioner Conor O’Higgins found that the items were not part of a single composite supply involving the robotic milking machine.

As a result, he said the items cannot be established as being part of the construction of the robotic milking machine and, therefore, the farmer’s appeal fails on this basis and Revenue’s determination stands.