Written answers

Tuesday, 6 December 2011

7:00 pm

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry South, Independent)
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Question 49: To ask the Minister for Finance if he will introduce a VAT refund for registered charitable non profit organisations similar to the model operated by the Danish Government, which does not contravene European Union regulations; and if he will make a statement on the matter. [38986/11]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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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. Essentially only VAT registered businesses which charge VAT are able to recover VAT. I appreciate the concerns of charities regarding the VAT issue and, as I indicated in the Seanad on 6 October 2011, I am prepared to have the matter examined by my officials in conjunction with the Revenue Commissioners and representatives of the charity sector. However, the examination of any options, including the Danish model referred to by the Deputy, must not only take into account the current demands on the Exchequer but also that charitable organisations are already in receipt of funding either directly or indirectly from the Exchequer, the existing tax relief scheme in respect of donations being just one example. Charities, voluntary and community groups, and sporting bodies also benefit significantly from grant schemes administered by a number of Government Departments.

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