Eamon Ryan (Dublin Bay South, Green Party)
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187. To ask the Minister for Finance the arrangements that exist regarding the collection of tax from internet purchases made here from the UK; where the tax is collected; and if the Government monitors purchases and sales on the Internet. [32129/16]

Michael Noonan (Limerick City, Fine Gael)
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I presume that the Deputy is referring to distance selling in the EU where goods are sold over the internet on behalf of a supplier in one Member State to a customer, not registered for VAT, in another Member State. VAT is governed by the EU VAT Directive (Council Directive 2006/112/EC), with which Irish VAT law must comply. Irish legislation, in compliance with the Directive, provides for distance selling arrangements. Under these arrangements, sales to customers in other Member States are liable to VAT in the Member State of the supplier, provided that the threshold appropriate to the Member State of the customer is not breached. Where sales exceed the threshold in any particular Member State, the supplier must register and account for VAT in that Member State.

Where a UK-based supplier sells goods to customers in Ireland, UK VAT is chargeable on those sales. However, if the total of such supplies to Irish customers exceeds the Irish threshold of €35,000, then the UK supplier must register charge and account for Irish VAT on sales to Irish customers. If the threshold is not exceeded, the UK supplier can also opt to register and account for Irish VAT in this State on his or her distance sales.

Revenue's overall approach to managing compliance is to undertake a range of targeted interventions that are most appropriate for dealing with the specific risks presented in individual cases including internet sales. Their work is also supported and enhanced with appropriate technology, including their Risk Evaluation Analysis and Profiling (REAP) risk identification system and capture of data from multiple sources. One of these sources is trading information received from merchant acquirers which contains indicators of cases involved in internet trading.

Revenue's extensive range of measures and activities, designed to address shadow economy activity, includes exploiting the potential of new and emerging technology to identify tax evasion associated with internet trading and business activity. This includes an increased focus on the use of "e"-audit techniques, which use statistical software to analyse electronic data.