Seán Sherlock (Cork East, Labour)
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Question 278: To ask the Minister for Finance the avenues open to a charitable organisation (details supplied) in County Cork with a view to recouping VAT paid at 21% on equipment purchased from charitable funds; and if he will make a statement on the matter. [30999/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Charities and non-profit groups engaged in non-commercial activity are exempt from VAT under the EU 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. However, there is provision for the refund of VAT incurred on the purchase of a new medical instrument or appliance by a person who donates such equipment to a hospital. The main conditions relating to this refund scheme are that: - the appliance or instrument is new and is donated to a hospital; - the appliance costs €25,390 or more in value (exclusive of VAT); - the appliance is designed and manufactured for use solely in medical research or in diagnosis, prevention or treatment of illness; - the appliance is purchased through voluntary donations, such that no part of the funds used in the purchase is provided directly or indirectly by the State, a State body or any public or local authority, which includes lottery funding; and, - the appliance is subject to a recommendation by the Minister for Health and Children that, having regard to the requirements of the health services in the State, a refund of tax would be appropriate.

Individual medical instruments or appliances costing less than €25,390 (exclusive of VAT) therefore do not qualify for a VAT refund under the scheme. Claims for refund in respect of other donated equipment meeting the above conditions must be made within 4 years, and should be submitted to the Revenue Commissioners VAT on Registered Repayments Section, River House, Charlotte Quay, Limerick.