Revenue’s role in relation to the supply of taxable solid fuels in the State lies in the collection of Solid Fuel Carbon Tax (SFCT) and VAT.
Solid fuel (coal and peat) is liable to excise duty in this jurisdiction in the form of Solid Fuel Carbon Tax (SFCT), which is a national excise that applies at different rates to four categories of solid fuel: coal, peat briquettes, milled peat and other peat. Liability to SFCT arises when solid fuel is first supplied in the State for use as a fuel. SFCT is payable by a taxable person who makes that first supply of solid fuel in the State. An SFCT return is required one month after the end of the two-month accounting period in which the supply is made.
Coal and peat are not “excisable” products. This means that coal and peat are not covered by the EU Control and Movement regime for excisable products (e.g. alcohol, tobacco) so, under EU rules, Revenue cannot impose any barriers to their movement into the State from other Member States or Northern Ireland. The movement of solid fuel into the State from Northern Ireland (or from anywhere in the EU) does not generate a liability to SFCT nor does the physical presence of solid fuel in the State. It is not until solid fuel is first supplied within the State that SFCT becomes liable. Therefore, there is no smuggling offence, in terms of evasion of SFCT, attaching to coal coming into the State from Northern Ireland. No Revenue offence arises where coal or other solid fuels are brought into the State or placed on the market here. Even if controls were possible, a person transporting solid fuel from Northern Ireland could claim that SFCT will be accounted for in due course if relevant first supplies of the transported solid fuel are later made in the State.
SFCT is not an import duty and does not become due until a first supply is made in the State. Every supplier who intends to make a first supply of liable solid fuel in the State must register with Revenue for the purposes of the tax. Where a solid fuel supplier based in the State sources some or all of their solid fuel supplies from outside the State, they will be accountable for SFCT when they make first supplies in the State and must register with Revenue to account for and pay SFCT. Where a supplier based outside the State delivers solid fuel into the State to a private individual, they must register with Revenue and pay the tax. This means that suppliers from outside the State, including Northern Ireland, who take orders for delivery to private individuals in the State are liable for SFCT and must register with Revenue. Similarly, courier companies who advertise on websites of solid fuel suppliers based in other jurisdictions offering to supply and deliver solid fuel direct to consumers in the State are liable for SFCT and must register with Revenue. It is important to note that where an individual personally purchases solid fuel outside the State and accompanies that solid fuel into the State, they do not have an SFCT liability provided the fuel is for their own private use. However, if that individual, instead of using the solid fuel themselves, supplies it to another person in the State, they will have made a first supply and will be liable to pay SFCT and must register with Revenue accordingly.
With regard to VAT, under the terms of the Protocol on Ireland / Northern Ireland, transactions involving the movement of goods (not services) between Ireland and Northern Ireland in either direction continue to be treated as intra-Community transactions and subject to EU VAT rules. These rules apply to business to business (B2B) supplies of goods to / from Northern Ireland to taxable persons in Ireland and other EU Member States. The goods, including fuel products, are supplied at the zero rate of VAT and the taxable person in receipt of those goods self-accounts for VAT on a reverse-charge basis and, if applicable, takes a simultaneous VAT deduction in their next VAT return. The onward distribution and sale of a fuel product to a consumer in the State is subject to the normal VAT rules and the Irish supplier is liable to account for VAT, at the reduced rate of 13.5%, on the supply. The consideration for a supply of goods or services is defined in EU VAT law and consists of everything which the supplier is entitled to receive in return for goods or services supplied including taxes, duties, levies and charges, excluding the VAT itself. Therefore, VAT is chargeable on the solid fuel carbon tax element of fuel products.
Where a business in Northern Ireland sells goods and arranges the transport of those goods to a consumer in Ireland, such sales of fuel products are referred to as intra-Community distance sales. Intra-Community distance sales of fuel products from Northern Ireland to a consumer in a Member State are subject to VAT in the destination Member State, which would be Ireland if the consumer is based in this State. In such cases, the supplier of those goods is required to register, subject to a threshold, in the State and account for VAT on those supplies.
VAT and SFCT are self-assessed taxes and compliance with the law is enforced using the full range of compliance interventions and enforcement provisions for self-assessed taxes. Compliance interventions and audits are undertaken on a risk-assessed basis. Liable fuel suppliers must register with Revenue and file relevant VAT and SFCT returns and pay any tax due by the due dates. Where suppliers do not submit returns by the due date, Revenue will issue an estimate of the tax(es) due. The estimate is the amount of tax that Revenue will pursue if a supplier does not complete and file their return. If a taxpayer fails to pay the amount due, including any debt for which an estimate has issued, Revenue may refer the debt for enforcement action. This can include sheriff enforcement, civil proceedings through the courts or attachment of third parties.
Finally, the Deputy asks about the enforcement of the new environmental standards on solid fuel which are due to come into force in September 2022. This is separate to taxation matters. I understand that laws relating to national standards for solid fuel come under the ambit of the Department of the Environment, Climate and Communication and are enforced through the local authorities operating under those laws. I am advised that Revenue does not have a role in relation to these environmental enforcement matters. While Revenue cannot impose any obstacles to the free movement of solid fuels into the State from other Member States and Northern Ireland, I understand that such imports are open to challenge by Local Authorities if the fuel does not meet environmental standards in this State. The same environmental standards apply to all solid fuel regardless of how they have been placed on the market in Ireland, including through online sales or other forms of advertising.
