John O'Mahony (Mayo, Fine Gael)
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Question 189: To ask the Minister for Finance the safeguards in place to prevent an individual from purchasing machinery and equipment in Northern Ireland or in the United Kingdom using the VAT number of another individual's company thus avoiding payment of VAT; if the Revenue Commissioners are aware of this practice; the number of seizures of plant and machinery in which this practice occurred in the years 2005, 2006, 2007 and 2008; and if he will make a statement on the matter. [3091/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that traders in an EU Member State who sell goods at zero rate of VAT to traders in other EU Member States have obligations in relation to verifying the VAT numbers of the purchasers, maintaining appropriate documentary evidence that the goods have been exported and the furnishing of periodic statements in relation to such exports to their tax authority under the VAT Information Exchange System (VIES). Checking the validity of VAT numbers may be done through the EU Internet website to which they have free access. Traders leave themselves open to being held liable for the VAT on the goods if the number is invalid. Traders also have obligations in relation to justifying the application of the zero rate, that is, that the goods have left the state in question and are not simply re-sold in that state. Traders are also advised of their obligation to confirm that the purchaser of the goods is, in fact, the holder of the VAT registration number quoted at the time of supply.

In the case of cross-border transactions between the UK and this State, checking the validity of VAT registration numbers through the VIES computer "Gateway", and indeed other tax compliance information, with their counterparts in Her Majesty's Revenue & Customs in the UK, and in Northern Ireland in particular, is part of the checks carried out by Revenue officers in connection with audits and assurance checks where risk or suspicions arise. These checks are carried out using the EU VAT Mutual Assistance Programme, which has been designed specifically to tackle cross-border VAT fraud. This programme allows for exchanges of information between EU Member States in relation to VAT matters and it also allows the presence of officials from a Member State in another Member State while enquiries are being carried out. These are VAT anti-fraud measures and Ireland plays a full role in the exchange of information with all other Member EU States, including the UK, with whom we have a very good working relationship.

I am advised that Revenue does not have details of the number of cross-border VAT fraud cases specifically involving plant and machinery for the years requested. However, Revenue is currently engaged in a number of ongoing cross-border investigations involving the zero VAT rating of machinery. I can assure the Deputy that any specific allegations regarding the abuse of VAT numbers will be investigated fully.