Kevin Humphreys (Dublin South East, Labour)
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Question 104: To ask the Minister for Finance if VAT returns from persons and companies registered for VAT provide a breakdown of the amount arising from individual transactions on goods and services; the way the Revenue Commissioners ensure that the correct amount is paid; and if he will make a statement on the matter. [28256/11]

Michael Noonan (Limerick City, Fine Gael)
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With regard to the breakdown of VAT returns, I am advised by the Revenue Commissioners that details of cumulative data rather than individual transactions are required to be entered on VAT returns. In the case of the VAT3 return, which is submitted bi-monthly, tri-annually or bi-annually depending on certain criteria, traders are required to enter the total VAT charged by them on sales/services and the total VAT charged to them on purchases/services for that period. The difference is the amount of VAT payable/repayable. In addition they enter details of the value of goods sent to and received from other EU countries. This approach minimizes the administrative burden and compliance costs for businesses.

VAT registered customers are also obliged to complete an annual Return of Trading Details (RTD). There are four categories on the Return of Trading Details –

1. value of supplies of goods & services;

2. value of acquisitions from EU countries, net of VAT & VAT free imported parcels;

3. value of stock for resale (purchases, intra-EU acquisitions & imports);

4. value of other deductible goods & services (purchases, intra-EU acquisitions & imports).

Under each of these categories, customers record a cumulative figure for each of the VAT rates (exempt, 0% exports and 0% home, 4.8%, 5.2% flat-rate addition, 9%, 13.5% and 21%).

As regards ensuring that the correct amount of VAT is paid, in accordance with Revenue's risk-based approach, cases are selected for intervention based on the presence of various risk indicators and other information available, with the aid of our computerised risk analysis system, REAP. The type of intervention to be undertaken is, in any particular case, the one considered to be the most appropriate to target the specific risk identified. In many cases this may lead to a single tax head, multi tax head or single-issue audit rather than a comprehensive audit. REAP includes the data from VAT3 and RTD returns. VAT3 data is included from 2007 to 2011. RTD data is included from 2007 to 2010. Various rules within REAP are designed to interpret this data, and to identify risks for further consideration by Revenue auditors.