Dáil Éireann Debate, Wednesday - 18 September 2013
196. Deputy Seán Ó Fearghaíl asked the Minister for Finance if he will address the concerns raised in correspondence (details supplied) regarding excise duty and below cost selling of alcohol; if he will implement the recommendations made; and if he will make a statement on the matter. [37736/13]
View answerThe issue of excise rates on alcohol will be considered in the context of the forthcoming Budget.
General policy in the area of pricing is a matter for the Department of Enterprise, Jobs and Innovation. However, with regard to the VAT treatment of below cost selling, 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.
