Dáil Éireann Debate, Tuesday - 13 March 2012
145 Deputy Michael Creed asked the Minister for Finance if he or the Revenue Commissioners has calculated the cost of VAT refunds on alcohol products sold below cost; if he will introduce a ban on the retailing of alcohol at below invoice cost; and if he will make a statement on the matter. [13733/12]
Amharc ar fhreagraVAT 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 regard, 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.
As regards calculating the VAT impact of below cost sales, separate figures are not available for input VAT on goods that were subsequently sold at a discount because traders' VAT returns show only the total input VAT and the total output VAT for the period covered by the return.
