Joan Burton (Dublin West, Labour)
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Question 276: To ask the Minister for Finance if there are proposals for the Government to refund VAT payments to registered charities; the estimated annual cost to the Exchequer of such a proposal; and if he will make a statement on the matter. [35182/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am informed by the Revenue Commissioners that it is not possible to furnish figures of the VAT paid by charities and non-profit organisations on their purchases of goods and services from VAT registered bodies, as the information furnished on VAT returns does not require the yield from particular consumers to be identified.

In relation to the application of VAT to charities and non-profit organisations, the position is that charities and non-profit groups engaged in non-commercial activity are exempt from VAT under the EU Sixth VAT Directive, with which Irish VAT law must comply. This means they do not charge VAT on the services they provide and cannot recover VAT incurred on goods and services that they purchase. Essentially only VAT registered businesses which charge VAT are able to recover VAT.

Ministerial Orders have been used in a limited way to provide refunds of VAT on certain aids and appliances for the disabled and on medical equipment donated voluntarily to hospitals. These orders are focused and are designed to target specific circumstances. However, under EU law, it would not be possible to introduce new schemes within the VAT Act 1972 to relieve charities from the obligation to pay VAT on goods and services that they purchase.

I would add that the tax code currently 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. Moreover, charities also benefit significantly from the uniform scheme of tax relief for donations, which was introduced in the Finance Act 2001 and which, for the first time, allowed tax relief on personal donations to domestic charities and other approved bodies. The relief is based on the taxpayer's marginal rate which for an individual donor could be as high as 42%. In the case of donations from the PAYE sector the relief is given directly to the charities.

Joan Burton (Dublin West, Labour)
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Question 277: To ask the Minister for Finance if there are proposals to charitable or sporting bodies such as the GAA regarding stamp duty; the estimated annual cost to the Exchequer; and if he will make a statement on the matter. [35183/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I assume the Deputy is referring to proposals to amend the stamp duty code in the forthcoming Budget. I further assume the Deputy is seeking the cost of exempting sporting bodies from stamp duty.

As the Deputy is aware, I do not comment on possible changes ahead of the Budget. I am also informed by the Revenue Commissioners that they are unable to provide a cost of introducing an exemption from stamp duty for sporting bodies.

The Deputy will already be aware of the fact that an exemption from stamp duty is provided for in the stamp duty code in respect of a conveyance, transfer or lease of land made for charitable purposes to a body of persons established for charitable purposes only. This exemption is confined to bodies of persons which are recognised under law as having been established for charitable purposes only in which case the entirety of the activities carried on by the body in question must be charitable in nature.

In this regard, voluntary sporting bodies that do not have this charitable exemption are liable to stamp duty in the normal manner. However, there are separate relieving provisions in the tax code for not-for-profit and member-controlled sporting bodies. Amateur and athletic associations are not liable to income tax. In addition, a generous capital gains tax exemption is available to sports bodies where they dispose of a property and the proceeds are re-invested in new assets for the promotion of the sport in question. In this situation, capital gains tax is not payable. In addition, sporting organisations can avail of the special donations scheme. Where donations are made to qualifying sporting associations, the Revenue Commissioners will apply relief on the donation at the donor's marginal tax rate and refund the relief to the sports body in question.