Joan Collins (Dublin South Central, United Left)
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83. To ask the Minister for Finance if he agrees that funds raised to support the health service should be subject to value added tax; if not, if he will consider making provision in the budget to exclude moneys provided by charitable organisations (details supplied), particularly moneys used to support public services, from being subject to value added tax in order that all moneys go into these projects; and if he will make a statement on the matter. [24095/15]

Michael Noonan (Limerick City, Fine Gael)
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VAT is a tax on consumption and is applied to supplies being made by a person and not to supplies received by them. 

Non-profit groups engaged in non-commercial activity are exempt from VAT under the EU VAT Directive.  This means that they do not register for VAT and cannot recover VAT incurred on goods and services that they purchase.  This non-entitlement to VAT deductibility is a general feature of VAT exemption.

There is no provision in either European law or Irish VAT law to allow a zero-rating or exemption for supplies of this nature.  However, there is a specific VAT Refund Order (SI 58 of 1992) that provides VAT incurred on the purchase or importation of new medical instruments and appliances (excluding means of transport), which is purchased through voluntary donations, may be refunded to hospitals or donors, as appropriate, subject to conditions.  Further information on the Refund Order, its conditions and the refund claim for VAT 72 is available on the Revenue website www.revenue.ie.