Written answers

Thursday, 26 January 2012

5:00 pm

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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Question 57: To ask the Minister for Finance if he will consider a change to the VAT regime for travel agents to enable them to offer gross wholesale accommodation prices to Irish agents in order that they can compete on an equal footing with travel agents from the UK who do not have to charge VAT on their offers and are at a competitive advantage; and if he will make a statement on the matter. [4503/12]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I am informed by the Revenue Commissioners that Section 88 of the VAT Consolidation Act 2010 provides for a scheme for travel agents known as the Travel Agents Margin Scheme (TAMS). The scheme deals with the activities carried on by travel agents who act in the capacity of a principal when supplying certain travel services such as transport, accommodation, etc, which they have bought in from third parties for onward supply to travellers. Under the scheme, which is provided for in the EU VAT Directive, such travel agents are liable to VAT at the standard rate in respect of the margin on their supply of travel services, not in respect of the overall consideration they receive for such services. The scheme, which was introduced with effect from 1 January 2010, operates in all EU States.

Supplies of travel services, e.g. accommodation, transport, etc., between travel agents, known as wholesale supplies, are not covered by the Margin Scheme but are subject to VAT at the rates applicable to those services in the normal way. If a travel agent established in Ireland acquires accommodation services from another travel agent, also established in Ireland, that other travel agent will charge VAT on the supply at the second reduced rate, currently 9%. The travel agent who acquires the accommodation and supplies it to a traveller will charge VAT on the margin at the standard rate, currently 23%.

If a travel agent in Ireland acquires accommodation services from a UK based agent, then that UK travel agent must register for VAT in Ireland and charge Irish VAT on all such supplies regardless of value. The Irish travel agent who acquires the accommodation and supplies it to a traveller will charge VAT on the margin.

In relation to wholesale supplies described above, the same VAT treatment applies to the supplies made by both the travel agent established in Ireland and the agent established in the UK. Therefore, the question of a competitive advantage should not arise. If the Deputy believes this is not the case I suggest that he provide the details to the Revenue Commissioners.

Photo of Jim DalyJim Daly (Cork South West, Fine Gael)
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Question 58: To ask the Minister for Finance the number of applications received by him from various organisations seeking charitable status for each of the past seven years in tabular form; and if he will make a statement on the matter. [4516/12]

Photo of Jim DalyJim Daly (Cork South West, Fine Gael)
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Question 59: To ask the Minister for Finance the number of charitable status applications that have been granted by him for each of the past seven years in tabular form; the average waiting time for an application to be processed; and if he will make a statement on the matter. [4521/12]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 58 and 59 together.

The processing of applications for charitable tax exemption is a matter for the Revenue Commissioners. I am informed by Revenue that to avail of the exemption a body or trust must be established for charitable purposes only and must apply all its income for charitable purposes. Procedures are in place by Revenue towards ensuring that the tax exemption is only granted to bodies that meet the necessary criteria for such exemption. These comprise an application procedure, which includes the submission of a Governing Instrument. The objects and powers of a body applying for charitable tax exemption must also be framed in a manner that ensures its income or property can be applied only for charitable purpose.

The number of applications for charitable tax exemptions during the last 7 years, together with the number approved is outlined in the table. It should be noted that some applications are refused when the full supporting information is received with the application and it is clear that an exemption is not appropriate. In other instances the application is not pursued further when the applicants become aware of the necessary criteria for such exemption and the administrative procedures required to ensure ongoing compliance with the terms and conditions of the exemption.

Once a fully completed application form and all supporting documentation requested by Revenue is received, applications are processed in accordance with Revenue's Customer Service Standards i.e. 80% within 10 working days and 100% within 20 working days.

Applications receivedApplications granted
2005553350
2006538353
2007537300
2008607392
2009543397
2010513350
2011507290

Photo of Jim DalyJim Daly (Cork South West, Fine Gael)
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Question 60: To ask the Minister for Finance if he is in receipt of an application for charitable status from an organisation (details supplied); when he expects a decision to be arrived at; and if he will make a statement on the matter. [4523/12]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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The processing of applications for charitable tax exemption is a matter for the Revenue Commissioners. I am informed by Revenue that to avail of the exemption a body or trust must be established for charitable purposes only and must apply all its income for charitable purposes. Procedures are in place to ensure that the tax exemption is only granted to bodies that meet the necessary criteria for such exemption. The objects and powers of a body applying for charitable tax exemption must also be framed in a manner that ensures its income or property can be applied only for charitable purpose.

Revenue has advised me that they originally received an application for charitable tax exemption from the named body in 2005. While certain additional information/documentation in respect of the application was sought by Revenue this was not produced at the time. The application process was recommenced in 2009 and despite correspondence with the agent representing the body in 2009, 2010 and 2011 all the requested information and documentation has not been provided to date. Revenue has advised me that until such time as the documentation requested is provided they are not in a position to make a final decision on whether or not the body in question meets the criteria for a charitable tax exemption.

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