Eoghan Murphy (Dublin South East, Fine Gael)
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Question 148: To ask the Minister for Finance his views regarding the proposal (details supplied) to use changes in the application of VAT on those visiting the country as a short-term method of increasing tourism numbers. [9540/11]

Michael Noonan (Limerick City, Fine Gael)
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Irish VAT law is governed by the EU VAT Directive. Articles 146 and 147 of this Directive provide for a scheme whereby persons from outside the EU can claim a refund on VAT charged to them on any goods purchased here that are brought outside the Community. This is known as the retail export scheme. The scheme specifically applies to goods and not services, and refunds can be obtained only on purchases of goods, such as souvenirs, gifts etc., bought for non-business purposes, which the tourist or traveller brings with them when leaving the EU. No refund can be obtained for goods that remain in Ireland, or for any services, such as hotel accommodation, car-hire or restaurant meals. For the refund to apply, the goods must be taken outside of the European Union by the purchaser. The basic principle is that the goods are treated as exports and are not consumed in the European Union. In this context, EU VAT law does not allow for a scheme as outlined by the Deputy.