Written answers

Thursday, 17 June 2004

4:00 pm

Photo of Dan NevilleDan Neville (Limerick West, Fine Gael)
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Question 97: To ask the Minister for Finance if he has plans to abolish taxation of all charities. [18158/04]

Charlie McCreevy (Kildare North, Fianna Fail)
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The tax code provides exemption for charities from income tax, corporation tax, capital gains tax, deposit interest retention tax, capital acquisitions tax, stamp duty, probate tax and dividend withholding tax.

The Revenue Commissioners are responsible for the administration of the relevant tax exemptions and for this purpose determine whether a body of persons or a trust claiming the benefit of any exemption is established for charitable purposes only. In the first instance, applications for exemption are examined having regard to whether the body concerned is engaged in either the relief of poverty, the advancement of religion, the advancement of education, or certain other works of a charitable nature beneficial to the community. In addition, the body must be legally established in the State and have its centre of management and control therein; must ensure that its objects and powers are so framed that every object to which its income or property can be applied is charitable, and must be bound, as to its main objects and the application of its income or property, by a governing instrument such as a memorandum and articles of association in the case of an incorporated body, deed of trust, constitution or rules in the case of an unincorporated body.

Charities are not obliged to submit annual returns of income. However, charities are obliged to submit a copy of the first year's financial accounts together with a report on activities within 18 months of the date that exemption from tax is granted. In addition, they are obliged to keep annual accounts and make them available to the Revenue Commissioners on request. Bodies with charitable tax exemption are reviewed by the Revenue Commissioners with a view to ensure their continued compliance within the terms of the exemption granted. Should the Revenue Commissioners form the opinion that the funds are not applied for charitable purposes only, or the body fails to submit annual accounts on request, they have general powers to withdraw the exemption granted.

I have no plans to change the above tax treatment of charities at this time.


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