Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

As the Deputy said, earlier this year I agreed to the establishment of a working group comprising representatives from my Department, the Revenue Commissioners and the Irish Charities Tax Reform Group to examine options available to reduce the VAT burden of charities. A report from the group was provided to me in my deliberations ahead of the 2016 budget. It was published and is available on the budget 2016 website.

We have not taken any action on foot of the report because tax expenditures can be quite a blunt instrument and I am not convinced they constitute the best way to address the issue. Following consultation with other member states, the report of the working group found relatively limited favourable VAT treatment for charities across Europe. Furthermore, the existing ministerial refund orders already in place in Ireland provide some VAT relief to charitable causes. Introducing a VAT refund scheme for charities would also, most likely, lead to similar claims from other VAT-exempt organisations, most notably sporting organisations. Requests for new ministerial refund orders have been consistently refused since the 1980s, primarily to maintain the integrity of the VAT system.