Revenue won’t appeal Kerry Co-op tax ruling

Revenue will not appeal a recent High Court ruling over a long-running tax dispute with members of Kerry Co-op, a spokeswoman for the tax authority has confirmed.

The co-op, the largest shareholder in the listed Kerry Group, was initially notified in 2016 of a potential tax liability related to the issuing of so-called patronage shares to 3,500 of its members between 2011 and 2013. Revenue held that the shares should be classed as trading income and subject to income taxes, leaving its members on the hook for a reported total of €20 million in unpaid taxes.

Kerry Co-op appealed the decision to the Tax Appeals Commission in 2017 with a test case involving one of its members. The Commission ruled in the farmer’s favour in 2020, a decision Revenue then appealed to the High Court, which also sided with the co-op member earlier this year, finding the patronage shares should not be classed as income.

Revenue has now notified the co-op that it will not pursue the matter any further. A spokeswoman for Revenue confirmed it would not be appealing the decision and that it would be “dealing directly with the taxpayers involved regarding the implications”.

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In a statement on Friday, Kerry Co-op chairman Denis Carroll welcomed the decision: “This is hugely significant and very positive news, not only to our 3,500 milk suppliers but for co-operatives across the country, and finally closes a long and arduous chapter relating to the correct and appropriate tax treatment of patronage shares.”