Rate now
4.5%
The addition is there to make up for the VAT you pay on farm costs without having to register for VAT. The buyer pays it to you and claims it back on their own VAT return.
Quick facts
- Rate now
- 4.5%
- From 1 January 2027
- 4.8%
- Who gets it
- Farmers not registered for VAT
- Paid by
- VAT-registered buyers
- Not paid on
- Sales to another flat-rate farmer
Who it applies to
A flat-rate farmer is a farmer who is not registered, and not required to register, for VAT on their farming activities.
You add the flat-rate addition when you sell farm produce or farm services to a VAT-registered business, such as a creamery, meat factory or merchant.
It is not payable when you sell to another flat-rate farmer.
How much it is
The addition is a percentage of the amount the buyer owes you. The rate is 4.5% now. Teagasc's Budget 2027 summary says it rises to 4.8% from 1 January 2027.
Revenue gives an example. On milk worth €1,000 at a 4.5% rate, the creamery pays a flat-rate addition of €45 on top.
How it works
Sell to a VAT-registered business as normal
The addition applies when a flat-rate farmer supplies farm produce or farm services to a VAT-registered business.
The buyer adds the percentage to your price
It is worked out as a percentage of the amount payable to you for what you supplied.
The buyer claims it back, not you
The VAT-registered business treats it like normal input VAT and deducts it on its own VAT return.
Check the rate on each payment
From 1 January 2027 the addition should rise from 4.5% to 4.8%.
Things to watch
Broiler chicken services are excluded. Since 1 September 2025, stock minding, rearing and fattening of broiler chickens gets no flat-rate addition.
The 4.8% rate was announced in Budget 2027. It needs the Finance Bill to pass, with Finance Act 2026 due to be signed before Christmas.
Common questions
What is the flat rate addition for farmers?
A percentage that farmers not registered for VAT add to their price when selling produce or farm services to a VAT-registered business. It compensates them for VAT paid on farm costs.
What is the flat rate addition in 2026?
4.5%. Budget 2027 increases it to 4.8% from 1 January 2027.
Do I get the flat rate addition if I sell to another farmer?
Not if the other farmer is also a flat-rate farmer. It is only payable by VAT-registered businesses.
Who pays the flat rate addition?
The VAT-registered buyer pays it to you, then deducts it on its own VAT return like normal input VAT.