John Browne (Wexford, Fianna Fail)
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Question 66: To ask the Minister for Finance if his attention has been drawn to the situation in which rights have been given to entities outside of Ireland not to disclose matters relevant to the European Free Movement of Goods (details supplied) thus adversely affecting small medium enterprises here and the economy and if he will act to close this VAT loophole and ensure that Irish companies are not put at a disadvantage. [7799/11]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that under the European common system of Value-Added Tax a VAT-registered trader in one Member State supplying goods to a VAT-registered trader in another Member State may zero-rate the supply and the customer must self account for VAT in that other Member State. The Value-Added Tax treatment of intra-EU cross-border sales of goods means that where, for example, a UK VAT-registered supplier supplies goods to an Irish VAT-registered customer the transaction is not subject to UK VAT and the Irish customer must self-account for Irish VAT. In addition, the EU VAT Directives provide that any VAT registered trader who supplies goods to a VAT registered person in another Member State must complete a VAT Information Exchange System (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 compliance programmes in Member States. The VIES Statements are a reporting requirement that is distinct from Financial Regulation Standard 8 and details of intra-Community supplies between a retailer established in another Member State and an Irish retailer should be included on a VIES Statement.

The information provided by the Deputy refers to UK suppliers shipping goods to Ireland on behalf of and for UK retailers using Irish VAT numbers. The Deputy suggests that this may be happening in some cases without applying the correct invoicing arrangements, resulting in a loss of VAT. I am advised by the Revenue Commissioners that their audit and assurance programmes in relation to VAT include an examination of intra-community acquisitions, where such imports are a feature of the businesses being audited. These examinations generally involve a cross check of the VIES system. Where there are indications that incorrect arrangements may be in operation the Revenue Commissioners on their own or, in the case of UK suppliers in conjunction with HM Revenue and Customs (under mutual assistance procedures), carry out further enquiries to ensure compliance with VAT legislation. If the Deputy has more specific details in relation to the alleged abuses he should forward those details to the Revenue Commissioners.