David Stanton (Cork East, Fine Gael)
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Question 10: To ask the Minister for Finance his plans to make changes with respect to tax issues affecting charities; and if he will make a statement on the matter. [27642/11]

Michael Noonan (Limerick City, Fine Gael)
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There are several provisions in the tax code that provide tax relief for charities and charitable giving. These include income tax relief on donations, capital taxes relief on inheritances given to charities and special treatment under the DIRT regime.

The Commission on Taxation made a number of recommendations, some of which would cost the Exchequer in terms of tax foregone. However, officials from my Department, the Revenue Commissioners and representatives of the Irish Charities Tax Reform Group have been meeting, with a view to bringing forward proposals that would reduce the administrative burden on charities in operating the donations relief scheme as it exists currently. The work of this group is ongoing and, if successful, should help charities.

In addition, the Government recently reconvened the Forum on Philanthropy and Fundraising. This body has met over the summer months and will produce an interim report shortly, which I expect will contain recommendations on several matters including tax reliefs for charitable giving and philanthropy.

The Deputy will be aware that all tax relief and incentives are subject to regular review as part of the annual budget and Finance Bill process. Any significant decisions taken by the Government to change such relief or incentives in this regard would normally be announced on budget day.

David Stanton (Cork East, Fine Gael)
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I thank the Minister for his response.

Does the Minister agree that there is a significant benefit to society from donations to charities? What is his view on PAYE and the self-employed being treated in a similar way, with tax relief going directly to the charity, for instance?

Will the Minister comment on data protection issues for charities re PPS numbers? Is there any consideration being given to reducing the €250 threshold introduced in 2001 to, say, €100? Will the Minister comment on VAT on donations? The Minister will be aware that, for instance, last year one organisation paid €4 million in VAT. Will the discussions the Minister mentioned include a compensation scheme for charities operated under European Commission rules similar to the scheme in operation in Denmark?

Michael Noonan (Limerick City, Fine Gael)
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All of the proposals being put forward by the Irish Charities Tax Reform Group are being taken into account at the meetings between officials of my Department, the Revenue Commissioners and the Irish Charities Tax Reform Group. If proposals come forward that we think are appropriate, they will be considered in the context of the budget.

There is a wider report which will emanate from the Forum on Philanthropy and Fundraising, which has been meeting over the summer months. I understand it will report shortly.

David Stanton (Cork East, Fine Gael)
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As the Minister brought it up, will he confirm that the issue of philanthropic donations being decoupled from other tax relief is one of the issues being addressed?

Michael Noonan (Limerick City, Fine Gael)
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There is no restriction on the issues with the Irish Charities Tax Reform Group or the Forum on Philanthropy and Fundraising can discuss. We will see what they report and then we will examine it.

Pearse Doherty (Donegal South West, Sinn Fein)
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I add my voice in support of the Irish charities, with their proposals on lowering the threshold to €100 and also some type of compensation fund scheme to reimburse a portion of the fundraising that has been lost to VAT. The latter is something I remember raising in the Seanad. It is not right that people who raise money to buy a piece of equipment for a hospital then must pay VAT on it, and the State benefits from the fundraising drive. In reality, perhaps the State should have been doing it in the first place.

What would be the loss to the Exchequer - the Minister may not have the figures with him but he could present them at a later stage - if the threshold was reduced from €250 to €100, and if the VAT was foregone in the case of fundraising efforts?

Michael Noonan (Limerick City, Fine Gael)
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I would need notice of that question.