Leo Varadkar (Dublin West, Fine Gael)
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Question 148: To ask the Minister for Finance if his attention has been drawn to the difficulties presented to small Irish companies who import goods from outside of the European Union and then re-export the same goods outside the European Union in not being able to reclaim the VAT and duty paid at the point of importation upon exportation if they are not registered for value added tax; if he will offer advice to such companies; if he will reform this system; and if he will make a statement on the matter. [9688/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that all goods imported into the European Union are subject to VAT at the same rate as similar goods sold within the Member State into which the goods are imported. In Ireland the VAT is charged by the Revenue Commissioners at the point of import. There is no provision for a refund of this VAT to persons who are not registered for VAT. However, there are provisions in place to deal with this difficulty. A VAT-registered business is entitled to a credit for all VAT incurred on purchases for business purposes, subject to certain statutory restrictions. Moreover, a VAT-registered business, which derives 75% or more of annual turnover from zero-rated intra-Community supplies of goods or from exports of goods to third countries, may apply to have most goods and services received by it, and intra-Community acquisitions and imports made by it, zero-rated for VAT purposes. This allows the goods and services to be received free of VAT by the business. If a business is engaged in the supply, including export, of taxable goods and its turnover exceeds or is likely to exceed €75,000 in any period of 12 months it is taxable and is obliged to register for VAT. A business whose turnover from the supply of taxable goods is below €75,000 may nonetheless elect to register for VAT. Finally, customs duty is normally payable on imports into Ireland from outside the EU. However there are a number of customs regimes (such as warehousing or inward processing) that provide for suspension of the customs duty where the goods are intended for subsequent re-export from the Community.