Dáil Éireann Debate, Tuesday - 18 February 2014
198. Deputy Pearse Doherty asked the Minister for Finance the grounds on which online bookmakers and betting intermediaries are exempt from the payment of VAT; and if he will make a statement on the matter. [8095/14]
View answer199. Deputy Pearse Doherty asked the Minister for Finance the way online bookmakers that will operate here following the passing of the Betting (Amendment) Bill 2013 will be treated for the purposes of VAT and corporation tax. [8096/14]
View answer200. Deputy Pearse Doherty asked the Minister for Finance the way remote betting intermediaries that will operate here following the passing of the Betting (Amendment) Bill 2013 will be treated for the purposes of VAT and corporation tax. [8097/14]
View answer201. Deputy Pearse Doherty asked the Minister for Finance the way online bookmakers not based in the EU that will operate here following the passing of the Betting (Amendment) Bill 2013 will be treated for the purposes of VAT. [8098/14]
View answer202. Deputy Pearse Doherty asked the Minister for Finance the way remote betting intermediaries not based in the EU that will operate here following the passing of the Betting (Amendment) Bill 2013 will be treated for the purposes of VAT. [8099/14]
View answer203. Deputy Pearse Doherty asked the Minister for Finance if the Revenue Commissioners are satisfied that the State is receiving all VAT due from the online gambling industry; and the total tax revenue raised in 2013 from the industry. [8100/14]
View answerI propose to take Questions Nos. 198 to 203, inclusive, together.
I am advised by the Revenue Commissioners that the VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. Article 135(1)(i) of the EU VAT Directive (Council Directive 2006/112/EC) provides that Member States shall exempt betting, lotteries and other forms of gambling, subject to the conditions and limitations laid down by each Member State. The Value-Added Tax Consolidation Act 2010 provides that the acceptance of bets that are subject to betting duty are exempt from VAT. The Betting (Amendment) Bill 2013, currently before the Houses of the Oireachtas, proposes to licence remote bookmakers and betting intermediaries. Once the Bill is enacted, section 49 of the Finance Act 2011, which provides that these operators are chargeable with betting duty and betting intermediary duty under Chapter 1 of Part 2 of the Finance Act 2002, will be commenced.
The acceptance of bets is the supply of a service for VAT purposes. The place of supply of a service to a non-taxable person for VAT purposes is the place where the supplier's business is established. The extension of the betting duty to remote (online) bookmakers and betting intermediaries will not, of itself, bring such operators within the scope of Irish VAT if they are not established in Ireland. The specific facts of each case would have to be considered in deciding if an operator is established in Ireland. Similarly, the extension of the betting duty will not, of itself, bring operators within the charge to corporation tax. The corporation tax code looks at whether non-resident companies, which carry on a trade here through a branch or agency, are chargeable to tax by reference to whether the branch or agency-related income may be attributable to a permanent establishment here.
Businesses, such as bookmakers, that are exempt from VAT are not required to register for VAT in relation to their supplies or to make bi-monthly VAT returns. Businesses that are registered for VAT generally make a bi-monthly return that simply provides details of the total VAT on sales and the total VAT on purchases. Businesses that are not established here have no requirement to make Irish VAT returns. For these combined reasons it is not possible to report the total tax revenue raised in 2013 from the industry.
I am advised by the Revenue Commissioners that their overall approach to tackling compliance is to make the appropriate intervention following careful appraisal of the risk factors in each case. Not all interventions conducted are in the form of an audit. The focus may vary from a comprehensive examination of all the taxes and duties for which a taxpayer may be liable, to a detailed check of a single tax-head, or a concentration on a single issue of concern. This targeted approach is greatly supported and enhanced with appropriate technology, including the Risk Evaluation Analysis and Profiling system REAP, integrating information obtained from multiple sources, and categorising taxpayers in accordance with defined risk criteria, including details of the compliance behaviour of the taxpayer in relation to filing and paying their taxes.
