Mattie McGrath (Tipperary South, Independent)
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132. To ask the Minister for Finance further to Parliamentary Question No. 160 and response if it is appropriate for the Revenue Commissioners to continue to provide a VAT rates section to their website; if he will confirm that the recipient of the VAT invoice is entitled to an input credit, at a higher rate as this is the amount that Revenue intend to collect form the issuer of the invoice; if he will confirm that it is policy to advise individual limited companies if requested in writing of the risks that have been indicated or other information that has warranted intervention; if he will further confirm where risk indicators are present but not actioned in any way upon by the Revenue Commissioners, as a result of available resources, if it is appropriate for penalising the limited company with further penalties and interest; if he will confirm the legislative basis for distinguishing between supply of immovable goods or construction services for immovable goods; and if he will further elucidate his definition of immovable goods and immovable property and their basis in legislation or revenue policy. [1161/14]

Michael Noonan (Limerick City, Fine Gael)
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I gave detailed responses to the Deputy's previous questions. The VAT Rates Database is an integral part of the information provided on the Revenue website. A key element to supporting voluntary compliance is the provision of up to date information. As the Deputy is aware, the Irish VAT system has a number of rates and it is absolutely critical that Revenue provides the VAT Rates Database on their website.

The recipient of a VAT invoice has an entitlement to an input credit only for the VAT shown on the invoice and only where the goods or services are used by him or her for the purpose of VATable supplies.

The rate of VAT on the supply of non-residential immovable goods is provided for in paragraph 15(1) of Schedule 3 to the VAT Consolidation Act 2010; while the rate applicable to services consisting of the development of, and work on, non-residential immovable goods is provided for in paragraph 15(2) of Schedule 3. In both cases the rate of VAT is 13.5%, provided in the latter case that the value of the goods supplied does not exceed two thirds of the total consideration for the service, excluding VAT.

Tax legislation provides that Revenue may make such inquiries necessary to satisfy themselves as to the accuracy of statements or particulars submitted by taxpayers. I am advised by Revenue that their overall approach to tackling compliance is to make the appropriate intervention following careful appraisal of the risk factors in each case. The appropriate compliance intervention is the one considered to be the most effective in targeting the specific risk or risks identified, and to influence the compliance behaviour of the taxpayer. This targeted approach is greatly supported and enhanced with appropriate technology, including the Risk Evaluation Analysis and Profiling system REAP.

Revenue has advised me that they do not consider it appropriate to publish the risk rules, or to always tell taxpayers why they have been selected for intervention, as it would prejudice the effectiveness of their compliance programmes. All letters issued to a taxpayer or agent will, however, clearly indicate the nature of the Revenue intervention.

It is a fundamental principle of self-assessment tax systems that returns filed by compliant taxpayers are accepted as the basis for computing tax liabilities. Revenue facilitates taxpayers who discover errors after submission of the relevant tax returns and who wish to regularise the position. Chapter Two of the Code of Practice for Revenue Audit provides a suite of opportunities for taxpayers who wish to regularise their tax and duty affairs. These opportunities provide for very significant reduction in penalties and Revenue strongly recommends that taxpayers review their tax and duty affairs regularly.

Where arising from compliance interventions by Revenue, defaults are discovered, legislation provides for the assessment of the tax underpaid, interest chargeable and the level of any penalties to be charged. The mere presence of risk indicators in a case does not necessarily mean that there will be an additional tax lability. Some risk indicators can be easily explained and do not require detailed examination. Further information on the application of penalties is contained in Chapter Four of the Code of Practice for Revenue Audit. Where the taxpayer does not agree that there is an additional tax liability the assessment may be appealed to the independent Appeal Commissioners.

Lastly, Revenue has also advised that any taxpayer who is dissatisfied about how their particular case has been handled can avail of Revenue's Complaint and Review Procedures, details of which are set out in the attached .