Gerry Horkan (Fianna Fail) | Oireachtas source

I move recommendation No. 12:

In page 93, after line 35, to insert the following:

“Value-Added Tax in respect of charities

46.The Minister shall, within three months of the passing of this Act, prepare and lay before Dáil Éireann a report on the introduction in 2017 of a capped Value-Added Tax compensation scheme for charities with reimbursement to commence in 2018.”.

This recommendation is looking for a report and much of the work has been done in the Department of Finance. There was a working group involving officials, members of the Irish Charities Tax Reform Group and a representative of EY, Ernst & Young, which completed its report last year. It looked at various options around a VAT compensation scheme that would be capped. It is estimated that about €77 million a year is paid by charities in VAT, which obviously eats in to what they are fundraising in the first place. The working group examined a number of different models including UK, Dutch and Danish schemes.We are asking the Government to look at the concept of charities and the VAT they pay and if it can be reimbursed. Charity status is something that is used in a very broad way. Ireland's highest earning charity is St. Vincent's Healthcare Group - it is defined as a charity. This recommendation proposes looking at a capped value-added scheme for charities that are paying large amounts of what they fundraise back in VAT.