Michael McGrath (Cork South Central, Fianna Fail)
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146. To ask the Minister for Finance the rules that apply to the taxation, VAT, excise duty and so on, of goods purchased online by persons here from abroad; the obligations that apply in respect of purchases from within the EU and outside the EU; the details of the Revenue Commissioners compliance activity in this area; and if he will make a statement on the matter. [38176/16]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by Revenue that VAT is governed by the EU VAT Directive (Council Directive 2006/112/EC), with which Irish VAT law must comply. Under the VAT Consolidation Act, goods sold over the internet on behalf of a supplier in another Member State to a customer in Ireland are liable to VAT in the Member State of the supplier, provided the value of their total sales to customers in Ireland does not exceed the Irish registration threshold of €35,000 for distance sales. Where sales to customers in Ireland exceed this threshold the supplier must register and account for VAT in Ireland. Suppliers that do not exceed the Irish registration threshold can opt to register and account for VAT in Ireland on their distance sales.

Where the goods are excisable products, such as alcohol and tobacco, the excise duty must be paid by the supplier before the goods arrive in Ireland.

Goods purchased online by persons here from suppliers established outside the EU are subject to customs duty, VAT and excise duty, which is normally payable prior to the release of the goods. However, small consignments, below a value of €22, imported from outside the EU are exempt from VAT and such consignments, below a value of €150, are not subject to Customs Duty.

A Revenue publication notification PN 1882 - Ordering Goods for Personal Use over the Internet or from Mail Order Catalogues - that is available on their website, details the import taxes and duties that apply to goods supplied from EU and non-EU suppliers. It points out that internet shoppers need to be aware that the full price of the goods involved may exceed the price quoted since some websites do not make allowance for charges such as Customs Duty, Excise Duty or VAT.

In terms of compliance, Revenue staff are deployed at ports, airports and postal/courier depots to ensure compliance with customs and tax legislation. They are supported by equipment and resources such as scanners, x-ray machines and detector dogs, which are deployed to detect prohibited goods and high duty goods, such as tobacco and alcohol, and high value imports where VAT and Customs Duty may be evaded. These compliance activities are very successful and Revenue seizes considerable quantities of excisable and prohibited goods annually in the course of delivery through postal and other delivery channels.

Revenue inform me that they are very aware of the growth in business to consumer internet sales and of the risks this presents, both to tax revenues and domestic business, and that they are working continuously to strengthen their controls in this area. Revenue uses a range of measures to monitor internet retail activity directed at customers in Ireland and takes action to require suppliers in other EU Member States that have reached or are likely to reach the distance sales registration threshold to register and account for VAT in the Ireland. Enquiries into the activities of suppliers based in other EU Member States are undertaken through the relevant national tax administrations under EU Mutual Assistance provisions.