98. Deputy Kevin Humphreys asked the Minister for Finance the total sum lost to the Exchequer in 2010 due to below-cost selling of alcohol, which allows retailers to claim VAT refunds due to losses they make on the sale; his plans to close this VAT subsidisation loophole. [14173/11]

Minister for Finance (Deputy Michael Noonan): I am advised by the Revenue Commissioners that 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. 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. 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. 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.