Dáil Éireann Debate, Thursday - 20 June 2013
86. Deputy Róisín Shortall asked the Minister for Finance further to Parliamentary Question No. 83 of 21 February 2013, if he will set out the impediments, if any, preventing him from maximising VAT revenue from the sale of alcohol by taking measures to alter VAT rules that would ensure that the VAT collected on the sale of alcohol products matches the value of VAT ultimately returned to the Exchequer. [30003/13]
Amharc ar fhreagraAs stated in the reply to the earlier Parliamentary Question, 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 the business inputs used in the purchase or production of goods or delivery of services.
I assume that the Deputy is suggesting some restriction on the recovery of VAT on inputs in the case of alcohol products sold at a price below their purchase price. Such a restriction would run counter to the EU-wide common system of VAT established on the principle that VAT is a general tax on consumption, exactly proportional to the price of the goods and services, however many transactions take place in the production and distribution process before the stage at which the tax is charged. This principle is set out in Article 1 of the EU VAT Directive (Council Directive 2006/112/EC). Article 168 of the VAT Directive states that in so far as goods and services are used for the purposes of taxed transactions of a taxable person, the taxable person shall be entitled to deduct the VAT due or paid in respect of supplies to him of goods or services. This right to deduct input VAT has been confirmed by the European Court of Justice in many cases brought before it.
