Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Question 192: To ask the Minister for Finance the amount of VAT refunded on below-cost selling of alcohol for each of the years 2009, 2010 and 2011; if he will address this issue immediately; and if he will make a statement on the matter. [9864/12]

Michael Noonan (Limerick City, Fine Gael)
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Separate figures are not available for input VAT on goods that were subsequently sold at a discount because traders' VAT returns show only the total input VAT and the total output VAT for the period covered by the return. VAT is a tax on the value added to a supply and the collection and recovery of VAT takes place at each stage of the chain of supply from manufacturing to retailer. Under EU and domestic VAT rules traders who are registered for VAT collect VAT on the goods and services that they sell. In turn such traders are entitled to recover the VAT they incur on their business inputs used in the purchase or production of goods or delivery of services. Consequently, if there is a decrease in value at any stage in the process the trader is entitled to a refund of the excess of VAT incurred over that collected.

In this regard, where a retailer is in a situation of net VAT gain as a result of below cost selling, this is not a loss to the Exchequer or an additional benefit to the retailer, it is merely how VAT is charged.