Tax reliefs related to farming

  1. Overview
  2. Stock relief
  3. Succession farm partnerships
  4. Leasing farm land
  5. Relief for increase in carbon tax on farm diesel

Relief for increase in carbon tax on farm diesel

Carbon tax on farm diesel refers to the carbon component of Mineral Oil Tax for farm diesel.  This charge was introduced on 1 May 2010 at a rate of €41.30 per 1,000 litres.  The rate was later increased to:

  • €54.92 per 1,000 litres on 1 May 2012
  • €70.42 per 1,000 litres on 1 May 2020.

The relief for increase in carbon tax on farm diesel allows farmers to claim a tax deduction equal to the difference between:

  • the amount of carbon tax paid on farm diesel

and

  • the amount of carbon tax that would have been paid had the rate stayed at €41.30 per 1,000 litres.

To qualify, the farm diesel must be used by a person carrying on a trade of farming.

For further information, see Tax and Duty Manual Part 23-01-36.