AADE: What applies to the special status of farmers – All tax changes
The AADE proceeded with the re-issue of the “Information Manual for farmers of the special status of Article 41 of the VAT Code”, in the material of which the achieved changes in the legislation have been incorporated. The AADE manual contains everything that interested parties need to know, on issues such as scope of application for the special status of farmers, exercise of the right of deduction of farmers of the special status, relocations of farmers, VAT refund procedure to farmers of the special regime, as well as specific issues.
It should be noted that farmers are in principle subject to VAT, because they gather the conceptual characteristics of those subject to the tax, that is, they exercise economic activity independently and carry out deliveries of goods and services for a compelling reason.
Consequently, farmers had to have the obligations, but also the rights that other persons have, which fall under the VAT system. “Normally, that is, farmers had to keep accounting records (books), issue invoices for the sales of their agricultural products or for the agricultural services they provide to others, submit the prescribed declarations and pay the VAT corresponding to the deliveries of agricultural products and the provision of agricultural services they carry out”, AADE points out in its introductory note.
However, as AADE explains, the application of the normal VAT regime to farmers with a limited scope of agricultural activity would create disproportionate problems of an administrative and organizational nature (such as indicative accounting monitoring and organization of the business). For this reason, the “special status of farmers” was foreseen, which is a transposition of articles 295-305 of the VAT Directive 2006/112/EC into the internal law of our country.
Who are under the special farmers’ regime from 1.1.2017
The special status of farmers includes farmers who:
a) during the previous tax year, delivered to any person agricultural products of their production and provision of agricultural services with a value of less than fifteen thousand euros (15,000 euros) and
b) received subsidies with a total value of less than five thousand euros (5,000 euros).
The aforementioned criteria are taken cumulatively, i.e. both must be met, in order for the persons in question to be included in the special status. Based on this legal framework, it is clarified that farmers who receive subsidies of less than 5,000 euros, even if they do not deliver any goods or provide agricultural services, are registered under the special status of farmers.
Examples
1) A farmer of the special regime carried out in the tax year 2018 wholesale sales worth 14,000 euros and at the same time carried out retail sales (e.g. from the deliveries of 15 cans of oil, which sold with the issue of a special element to other farmers of the special regime) worth 1,030 euros and received subsidies of 2,000 euros. From 1.1.2019 he will join the normal VAT regime, given that his sales of agricultural products exceed 15,000 euros (14,000 +1,030 = 15,030 euros).
2) Civil servant in the tax year 2018 has an agricultural holding (cultivation and production of oranges) from which he collected, from wholesale sales, 10,000 euros and received a subsidy worth 3,500 euro. The civil servant in question is a farmer of the special status from 01.01.2019 and must submit the M0 form for his inclusion to the competent authority for income tax returns.
3) Farmer receives only subsidy and does not deliver agricultural products. The farmer in question is included if the amount of subsidies he receives is less than 5,000 euros.
4) Farmer only delivers agricultural products and does not receive any subsidy. The farmer in question is included, as long as the amount of deliveries of agricultural products and provision of agricultural services is less than 15,000 euros.