Thomas Pringle (Donegal South West, Independent)
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Question 106: To ask the Minister for Finance the measures in place to prevent persons from using business VAT numbers to make purchases free from VAT in Northern Ireland; if the Revenue Commissioners investigate these issues; and if he will make a statement on the matter. [10687/11]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that traders in any EU Member State who sell goods at the zero rate of VAT to traders in another EU Member State have legal obligations in relation to verifying the VAT numbers of the purchasers; this may be done through the European Commission website at http://ec.europa.eu/taxation_customs/vies/. Traders also have obligations in relation to justifying the application of the zero rate of VAT. The goods must be dispatched or transported from the State in question and the trader has an 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 State 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 basis. The increased frequency of filing of VIES statements will assist in countering cross-border 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 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.

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 is currently engaged in a number of investigations involving suspected cross-border VAT fraud.