Dáil Éireann Debate, Tuesday - 11 November 2014
185. Deputy Patrick O'Donovan asked the Minister for Finance if his Department examined the issue of the sale of alcohol in supermarkets and other multiples below the price which was originally paid for it, as a result of claiming VAT rebate on the differential from the Revenue Commissioners; and if he will make a statement on the matter. [42839/14]
View answerI would point out that there is no Exchequer loss as a result of below-cost selling of alcohol. 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.
