Timmy Dooley (Clare, Fianna Fail)
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Question 112: To ask the Minister for Finance if Northern Ireland coach companies have been reclaiming VAT from the Exchequer here on fuel purchased in the Republic of Ireland; and if he will make a statement on the matter. [12392/12]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that non-established businesses that incur VAT in one Member State for the purposes of their taxable business in another Member State are entitled to a refund of that VAT where certain conditions are met. EU Council Directive 2008/9/EEC sets out those conditions and the claims for refund are processed through the Electronic VAT Refund (EVR) system.

Passenger transport is an exempt activity and VAT is not refundable in respect of such activity, except in limited circumstances where a taxable person established in the State is engaged in the transport of passengers who are picked up from a destination in the State and transported to a destination outside the State. In 2011 Revenue undertook a review of domestic and EU legislation in relation to Electronic VAT Refunds, including the VAT and EVR Directives and ECJ judgements concerning interpretation of the latter Directive and the criteria governing entitlement to refunds set out therein. The review has clarified particular aspects of the Directive as it relates to VAT incurred for the purposes of carrying on activities that are taxable in the Member State in which the business is established but which are exempt in the Member State of Refund. Revenue have concluded that non-established passenger transport operators are not entitled to refunds of VAT, whether that service takes place wholly or partially in the State or whether it takes place wholly outside the State.