Jackie Healy-Rae (Kerry South, Independent)
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Question 158: To ask the Minister for Finance if his attention has been drawn to the fact that solid fuel suppliers that operate businesses here and in Northern Ireland have in place systems of evading the supervision of the VAT information exchange system, intrastat and mutual assistance requirements; his views on whether the new carbon tax will also be evaded; and if he will make a statement on the matter. [45821/09]

Jackie Healy-Rae (Kerry South, Independent)
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Question 159: To ask the Minister for Finance if his attention has been drawn to the fact that traders that operate businesses here and in Northern Ireland have evolved systems to evade the requirements of the VAT information exchange system, intrastat and mutual assistance controls of the Revenue Commissioner; and if he will make a statement on the matter. [45822/09]

Jackie Healy-Rae (Kerry South, Independent)
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Question 160: To ask the Minister for Finance if, in view of the fact that there are no controls on the land frontier with Northern Ireland, he is satisfied that the collection of the carbon tax at point of entry to the State via that route will be possible; and if he will make a statement on the matter. [45823/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 158 to 160, inclusive, together.

I am advised by the Revenue Commissioners that traders in any EU member state who sell goods at the zero rate of VAT to trade in another EU member state have legal obligations in relation to verifying the VAT numbers of the purchasers. This may be done through the EU Internet website to which they have free access. Otherwise, such 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 of VAT, that is, the goods must 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. The purchaser of goods under these intra-Community transactions is then legally obliged to account for and pay over the VAT due on the goods at the rate of VAT applicable to the goods in the member date of that purchaser. Thus, for example, traders in the State who purchase goods from Northern Ireland traders must account for and pay over to the Revenue Commissioners the Irish VAT due on those goods.

The EU VAT directives provide that any VAT-registered trader who exports goods to a VAT-registered person in another Member State must complete a VIES Statement detailing all the VAT-registered customers in other member states to whom he/she has supplied goods in respect of which that customer is liable for payment of the VAT due. The VIES statements form the basis of tax compliance programmes in Member States. Council Directive 2008/8/EC (amending Directive 2006/112/EC) provides for the more frequent filing of VIES statements and provides that traders may submit statements on a quarterly or monthly. The increased frequency of filing of VIES statements will further counter instances of potential evasion of VAT.

In the case of cross-Border transactions between the UK and this State, checking the validity of VAT registration numbers, and indeed other tax compliance information, with their counterparts in Her Majesty's Revenue and Customs in the UK, and in Northern Ireland in particular, is part of the checks carried out by Revenue officers during 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 one member state in another member state while inquiries 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.

Checks of the control procedures in place between the State and Northern Ireland form part of the work programmes of Revenue's Investigations and Prosecutions Division and the Revenue Regions. Revenue continues to liaise, as appropriate, with the competent authorities in Northern Ireland, under the EU Mutual Assistance programme. Revenue is currently engaged in a number of ongoing cross-border investigations involving the zero VAT rating of goods. If the Deputy has specific facts in relation to businesses evading VAT, whether in the area of cross border transactions or otherwise, the Revenue Commissioners would be grateful to receive such information. The Deputy can be assured that Revenue will assess and act on the information as appropriate.

Finally, in so far as a carbon tax is concerned, the Deputy will appreciate that it is the usual practice for the Minister for Finance not to speculate or comment in advance of the Budget on what it will contain and I do not propose to deviate from that practice.

On considering the introduction of a new tax or indeed an increase in current taxes a wide variety of factors are taken into consideration including the impact on cross-border trade.

When new taxes are being introduced there are always practical issues in relation to implementation that require consideration. In that regard, as is normal practice, my officials in conjunction with the Office of Revenue Commissioners and other relevant Departments will, if the need arises engage with those sectors involved in the implementation of the carbon tax to minimise, in so far as it is reasonably possible, practical difficulties.

161 to 165 to follow