Anne Rabbitte (Galway East, Fianna Fail)
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210. To ask the Minister for Finance the estimated annual losses to the Exchequer which result from retailer VAT reclaims owing to below invoice cost selling of alcohol; the estimated losses to the Exchequer since the repeal of the groceries order in 2006 relating to below invoice cost selling of alcohol; and if he will make a statement on the matter. [24618/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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VAT is a tax on the value added to a supply, and the collection and recovery of VAT takes place at each stage of the chain of supply from manufacturing to retailer. Under EU and domestic VAT rules, traders who are registered for VAT collect VAT on the goods and services that they sell. In turn, such traders are entitled to recover the VAT they incur on their business inputs used in the purchase or production of goods or delivery of services. Consequently, if there is a decrease in value at any stage in the process the trader is entitled to a refund of the excess of VAT incurred over that collected.

In this case, where a retailer is in a situation of net VAT gain as a result of below cost selling, this is not a loss to the Exchequer or an additional benefit to the retailer, it is merely how VAT is charged.