Niall Collins (Limerick County, Fianna Fail) | Oireachtas source

I thank the Deputy for raising this matter.

Solid fuel, that is, coal and peat, is liable to excise duty in the State in the form of the solid fuel carbon tax. The solid fuel carbon tax is a national excise and applies at different rates to four categories of solid fuel, including coal, peat briquettes, milled peat and other peat. The solid fuel carbon tax rate is €33.50 per tonne of carbon dioxide emitted.

Liability to solid fuel carbon tax arises when solid fuel is first supplied in the State. As solid fuels are not covered by the EU control and movement regime, there are no barriers or controls on solid fuels moving between member states and Northern Ireland. The movement of solid fuel across the Border into the State from Northern Ireland does not generate a liability to solid fuel carbon tax, nor does the physical presence of solid fuel in the State. It is not until solid fuel is first supplied within the State that solid fuel carbon tax becomes liable.

If solid fuel suppliers based in the State sources some or all of their solid fuel supplies from outside the State, they will be accountable for solid fuel carbon tax when they make first supplies in the State and must register with Revenue to account for and pay solid fuel carbon tax. If suppliers based outside the State bring solid fuel into the State for supply direct to consumers, they must register with Revenue for the solid fuel carbon tax. I am advised by Revenue that the majority of registered suppliers are importers or wholesalers and producers, and approximately 5% of those registered for solid fuel carbon tax are based in Northern Ireland. It is important to note that where a private individual travels to Northern Ireland to purchase solid fuel for personal use, no solid fuel carbon tax is payable provided the private individual accompanies the fuel back into the State.

With regard to VAT, under the terms of the protocol on Ireland and Northern Ireland, transactions involving the movement of goods between Ireland and Northern Ireland in either direction continue to be treated as intra-Community transactions and are subject to EU VAT rules. These rules apply only to business to business supplies of goods to or from Northern Ireland to taxable persons in Ireland and other EU member states. The goods, including fuel products, are supplied at the zero rate of VAT and the taxable person in receipt of those goods self-accounts for VAT on a reverse-charge basis and, if applicable, takes a simultaneous VAT deduction in the next VAT return. The onward distribution and sale of a fuel product to a consumer in the State is subject to the normal VAT rules and the Irish supplier is liable to account for VAT, currently the reduced rate of 13.5%, on the supply. The consideration for a supply of goods or services is defined in EU VAT law and consists of everything which the supplier is entitled to receive in return for goods or services supplied, including taxes, duties, levies and charges and excluding the VAT.

Therefore, VAT is chargeable on the solid fuel carbon tax element of fuel products.

Where a business in Northern Ireland sells goods and arranges the transport of those goods to a consumer in Ireland, such sales of fuel products are referred to as intra-community distance sales. Intra-community distance sales of fuel products from Northern Ireland to a consumer in a member state are subject to VAT in the member state of destination of the supply, which would be Ireland if the customer is based in the State. In such cases, the supplier of those goods is required to register, subject to a threshold, in the State and to account for VAT on those supplies.

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