Michael McGrath (Cork South Central, Fianna Fail)
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Question 73: To ask the Minister for Finance if he will provide details of the steps being taken to address the issue of coal originating in Northern Ireland being distributed in the Republic without payment of the relevant taxes. [5656/11]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that there are no taxation restrictions on businesses registered for tax in one EU Member State transacting business with customers in other EU Member States. As the Deputy will be aware, Value-Added Tax is a European Community wide-tax governed by the EU VAT Directive 2006/112/EC and all Member States must ensure their domestic VAT legislation complies with this Directive. The VAT treatment of cross-Border sales of goods depends on the VAT status of both the supplier and the customer.

Where a UK VAT-registered supplier sells goods, including coal, to a VAT-registered customer in this State the transaction is not subject to UK VAT and the Irish customer must self-account for Irish VAT at 13.5%. Where the total value of supplies by a UK supplier to unregistered customers in Ireland exceeds €35,000 in a year the UK supplier must register and account for Irish VAT on all such supplies.

The VAT Directive provides that VAT-registered persons must lodge periodic VIES Statements of their intra-Community supplies of goods and services showing the total value of goods and services supplied in the period analysed by each VAT-registered person in each EU-member State. Member States, including Ireland, use the information on the VIES statements to check compliance in relation to self-accounting for domestic VAT. Council Directive 2008/8/EC provides for the more frequent filing of VIES Statements (quarterly or monthly) and the increased frequency of filing the VIES Statements provides better real-time information to counter instances of potential evasion of VAT.

The distribution of coal by UK suppliers to Irish customers has been the subject of compliance enquiries in Revenue Regions and is subject to periodic review. Where the circumstances indicate significant evasion the matter is passed to Revenue's Investigation and Prosecutions Division for investigation with a view to possible prosecution. Revenue liaise on an ongoing basis with their counterparts in HM Revenue and Customs Northern Ireland in relation to cross-Border activities where there is the potential for tax evasion.