Andrew Doyle (Wicklow, Fine Gael)
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Question 160: To ask the Minister for Finance if retailers involved in the sale of alcohol beverages at below cost can subsequently reclaim from the Revenue the VAT paid by them on the original purchase of the alcohol from suppliers as an input cost/VAT credit; if his attention has been brought to concerns expressed in other jurisdictions regarding VAT offsets/credits being secured by retailers who offer alcohol for sale in cut price promotions; if he will provide details on the extent to which such claims for VAT input cost offsets or credits have been made here in 2009 and 2010; his views on whether it is desirable from a public policy perspective that VAT credits should be used in such a manner to fund the cut price sale of alcohol; and if he will make a statement on the matter. [2134/11]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that under EU and domestic VAT rules traders who are registered for VAT collect VAT on the goods and services that they sell. In turn such traders are entitled to recover the VAT they incur on their business inputs used in the purchase or production of goods or delivery of services. VAT is a tax on the value added to a supply and the collection and recovery of VAT takes place at each stage of the chain of supply from manufacturing to retailer. Consequently, if there is a decrease in value at any stage in the process the trader is entitled to a refund of the excess of VAT incurred over that collected. Separate figures are not available for input VAT on goods that were subsequently sold at a discount because traders' VAT returns show only the total input VAT and the total output VAT for the period covered by the return.