Patrick O'Donovan (Limerick, Fine Gael)
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160. To ask the Minister for Finance the recommendations the Charities Working Group made in respect of the imposition of value added tax on charities; if he has accepted these and if they will be implemented. [45256/15]

Michael Noonan (Limerick City, Fine Gael)
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Earlier this year, I agreed to the establishment of a Working Group comprising representatives from the Department of Finance, the Revenue Commissioners and the Irish Charities Taxation Reform (ICTR) group to examine options available to reduce the VAT burden of charities. A report from the group was provided to me in my deliberations ahead of Budget 2016 and is available on the Budget 2016 website.

Charities 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.

While the Report acknowledged the additional burden the VAT exemption imposes on charities, I decided at this time not to introduce any new tax relief in this area.