Jerry Cowley (Mayo, Independent)
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Question 117: To ask the Minister for Finance if he will provide a full listing of all foods subject to VAT at 21%; and if he will make a statement on the matter. [8430/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am advised by the Revenue Commissioners that it is not possible to supply a complete listing of all food items which are subject to the 21% rate of VAT. In general, under paragraph (xii) of the Second Schedule to the Value Added Tax Act, 1972, most food sold by retail shops is liable to the zero rate of VAT. This includes most basic foodstuffs, for example, bread, butter, tea, sugar, meat, milk and vegetables. However, certain food items which are specifically excluded from the zero rate of VAT are subject to either the reduced VAT rate of 13.5% or the standard rate of 21%.

Examples of foods which are subject to the reduced VAT rate of 13.5% include flour or egg-based bakery products such as cakes, crackers and certain wafers and biscuits. These are provided for under paragraph (xxxi) of the Sixth Schedule to the Value Added Tax Act, 1972.

Examples of foods which are subject to the standard VAT rate of 21% include sweets, chocolates, wafers and biscuits wholly or partly covered or decorated with chocolate or other similar product, confectionery, crisps, ice-creams and soft drinks, and also frozen desserts, frozen yoghurts and similar frozen products.

Hot food, including hot cooked chickens, sold by retail shops or supermarkets is liable to the reduced VAT rate of 13.5%. However, freshly baked bread supplied in the course of a grocery business is liable to the rate appropriate to the same food when cold.

A dedicated VAT information leaflet, no. 19/01, on the rates of VAT applicable to food and drink is available on the Revenue Commissioners' website at www.revenue.ie. Access to a database providing VAT rates for specific items, including food items, is also available on the Revenue Commissioners' website.

Joan Burton (Dublin West, Labour)
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Question 118: To ask the Minister for Finance if his attention has been drawn to the practice by which builders and property developers avoid stamp duty at 9% by building under licence; the value of such transactions; the estimated cost of tax and stamp duty foregone to the Exchequer; and if he will make a statement on the matter. [8382/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Stamp duty is a charge on documents, which are mostly legal documents, used in the transfer of property. Where a property is purchased or swapped, stamp duty is charged on the conveyance or transfer effecting change of legal ownership of the property concerned. Under the stamp duty code, a builder or developer can obtain a licence from a vendor to build on land owned by the vendor without incurring a stamp duty charge at that stage of the venture. Once the buildings, whether commercial or residential, are completed, the conveyances or transfers of such properties to purchasers are chargeable to stamp duty in the normal manner unless specific exemptions are available to such purchasers. A similar stamp duty treatment would also arise in a situation where a builder or developer contracts to purchase land from a vendor without taking legal title to the land. The developer might complete the contract and not take a conveyance but rather, under a power of attorney given by the vendor, have the power to convey completed buildings to the ultimate purchasers. The normal stamp duty charge will arise on conveyances or transfers of the newly built properties to sub-purchasers subject to any exemptions applying. In such cases the stamp duty, if any, is paid but at a later stage.

Certain developments structured in the manner outlined above have come to the notice of the Revenue Commissioners and the situation is being kept under review. I have asked Revenue to report the outcome of its review to me and I will decide what action, if any, is required bearing in mind the effect on the housing market and the cost to the Exchequer.

As regards capital gains tax, from the point of view of the person who grants a licence to the developer rather than making an outright sale of the lands concerned, the same amount of capital gains tax would arise as if there were such a sale.