Éamon Ó Cuív (Galway West, Fianna Fail)
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51. To ask the Minister for Finance the reason the tax relief on donations to sports bodies made under section 847(A) of the Value-Added Tax Consolidation Act 2010 are in the case of PAYE tax payers payable to the eligible association or club and in the case of self-employed are repayable to the taxpayer; if it is planned to change this to make all donations payable to the beneficiary organisation; and if he will make a statement on the matter. [13763/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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Tax relief on donations to approved sports bodies for funding an approved project is provided for in section 847A Taxes Consolidation Act 1997 (TCA) which was introduced in Finance Act 2002. The arrangements for allowing tax relief on such donations by individuals vary depending on whether the donor is a self-assessed or a PAYE-only taxpayer.

- An individual who is a self-assessed taxpayer makes the donation to the approved sports body and claims tax relief on the donation by way of a deduction from her/his income on her/his annual income tax return.

- For donations made by PAYE-only taxpayers, relief is given on a “grossed up” basis to the approved sports body. In other words, the donation is treated as having been received by the approved body net of income tax at the donor’s marginal rate. This is similar to the way in which donations to approved (charitable) bodies under s. 848B of the TCA were treated at the time of the introduction of s. 847A TCA in 2002.

This approach now differs from the current tax treatment of donors under s. 848B TCA to approved (charitable) bodies. The provisions for tax relief for donations made by individuals to charities under s. 848B were changed in Finance Act 2012, with a view to simplifying the regime of tax relief for donations. This followed the recommendations of the Commission on Taxation 2009 and a working group, chaired by my Department, which included representatives of the charities sector, and subsequent to a public consultation process. Since 1 January 2013, tax relief under section 848A TCA in respect of donations made by individuals (whether self-assessed or PAYE-only taxpayers) under the Charitable Donation Scheme (CDS) is given to the body rather than to the donor. A donation which satisfies the conditions of section 848A is grossed up at the “specified rate” (currently 31%). The tax treatment of donations by individuals to approved sporting bodies was not within the scope of that working group or consultation and has not been changed.

I have no plans at the present time to change the tax treatment of the various classes of tax-payer under s. 847A TCA. However, tax expenditure measures are kept under regular review by my Department as part of its on-going programme of work. Proposals for change are dealt with in the context of the annual Budget and Finance Bill process.