Bernard Durkan (Kildare North, Fine Gael)
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Question 83: To ask the Minister for Finance if an association (details supplied) in County Kildare will be afforded full charity status given that the charitable status does not cover reclamation of VAT; and if he will make a statement on the matter. [17693/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am advised by the Revenue Commissioners that the Celbridge Mental Health Housing Association Limited has been granted charitable status, that there is no separate concept of "full" charity status and that the status granted in this case allows for all the exemptions applicable to charities. A charitable body is exempt from income tax, corporation tax, capital gains tax, deposit interest retention tax, capital acquisitions tax, stamp duty, probate tax and dividend withholding tax.

With regard to VAT, the position is that when charities and non-profit organisations are engaged in non-commercial activity, they are exempt from VAT under the EU sixth VAT directive with which Irish law must comply. This means they do not charge VAT on the services they provide but cannot recover VAT on goods and services they purchase. Essentially, only VAT registered businesses are able to recover VAT.