Richard Bruton (Dublin North Central, Fine Gael)
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Question 100: To ask the Minister for Finance the effect of a recent European Court of Justice case (details supplied) on charities law here; the revenue implications of any changes; and if he will make a statement on the matter. [13574/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Deputy will be aware that charities law is a matter for the Department of Community, Rural and Gaeltacht Affairs. However, the case indicated by the Deputy concerns tax relief on donations to charities and was referred to the European Court of Justice by the German courts. The case involved a German taxpayer that had been refused tax relief on the donation of certain goods to the Centro Popular de Lagoa, a retirement home to which a children's home has been added, based in Portugal. The centre is registered as a charitable body in Portugal and is entitled to all exemptions and tax benefits available to such bodies under Portuguese law. The German tax system only permits tax relief for donations to charities based in Germany.

The Court ruled that:

Where a taxpayer claims, in a Member State, the deduction for tax purposes of gifts to bodies established and recognised as charitable in another Member State, such gifts come within the compass of the provisions of the EC Treaty relating to the free movement of capital, even if they are made in kind in the form of everyday goods.

Article 56 EC precludes legislation of a Member State by virtue of which, as regards gifts made to bodies recognised as having charitable status, the benefit of a deduction for tax purposes is allowed only in respect of gifts made to bodies established in that Member State, without any possibility for the taxpayer to show that a gift made to a body established in another Member State satisfies the requirements imposed by that legislation for the grant of such a benefit.

My Department is examining the ruling, in consultation with the Revenue Commissioners, in order to establish what amendments may be necessary to ensure that Irish tax legislation complies with the principles involved. Any such amendments will be brought forward in due course. It is not possible at this stage to estimate the revenue implications, if any, of any changes that may be brought forward.