Frances Fitzgerald (Dublin Mid West, Fine Gael)
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My Department, as part of its remit in supporting the retail sector to facilitate sustainable employment growth, is undertaking a number of initiatives aimed at supporting indigenous businesses to build their online presence. This is in acknowledgment of the increased spend of Irish consumers online, and the need to assist Irish businesses to compete in this space.

The Retail Consultation Forum, which I chair, was set up by my Department to provide a platform for structured engagement between the retail sector and Government Departments and public sector bodies. A Working Group of the Forum is examining capacity-building in the retail sector through tailored skills initiatives, including digital skills.

In addition, the Trading Online Voucher Scheme, funded by Department of Communications, Climate Action and Environment and delivered by the Local Enterprise Offices, was introduced in 2015 to provide training and match funding to microbusinesses to trade online. Over 1700 vouchers were approved in 2015, and 1140 in 2016. 587 vouchers have been approved in the first half of 2017 (to end June). Results from businesses in receipt of the TOV show that sales increased by 20%.

Furthermore, the Framework for Town Centre Renewal, developed earlier this year by the Town Centre Renewal Working Group of the Retail Forum, will help address the challenge of town centre renewal, another key concern for the sector. Addressing town centre renewal will be an important factor in sustaining the attractiveness of town centres as places not only to live in but to work in, do business in, invest in and to visit and shop in. The Framework sets out a practical step by step action plan for Stakeholders to work collaboratively to enhance their local town or village, and encourages towns and villages to establish a digital platform in response to the changing retail environment. It is also intended to be a support document for towns and villages applying for funding under the Town and Village Renewal Scheme.

The question of the adjustment of VAT rates is a matter for the Minister for Finance.

I am informed that developments are taking place at EU level to neutralise any VAT advantage gained by retailers from within or outside the EU. On 1 December 2016 the Commission published proposals aimed at modernising VAT on e-commerce. In the first instance, the proposals extend destination VAT to cross-border business-to-consumer supplies of goods to and supplies of goods from 3rd countries into the EU. This means that regardless of the location of the supplier, the rate of VAT charged on the supply of a good will be the rate of VAT applying in the Member State of the consumer. This levels the playing field for retailers so that consumers are not incentivised to purchase goods in Member States who apply lower VAT rates.

Secondly, the proposal abolishes the current €22 exemption threshold for low-value goods coming into the EU. This threshold is a long standing administrative measure to reduce the burden on customs officials, but in the online age has become a key tax discrimination for EU retailers. The abolition of this threshold will add to the level playing field between EU and non-EU retailers.

In order to facilitate the charging of VAT on supplies of goods from 3rd countries into the EU, the proposals include a provision to deem marketplaces as liable to pay VAT due by 3rd country suppliers who supply business-to-consumer into the EU through those portals. This is a significant change that will level the playing field between non-EU online retailers and domestic and EU retailers in a practical manner. Discussions on these proposals are ongoing at EU level and are due to be implemented by 2021.