Thursday, 18 November 2021
Department of Finance
I am informed by Revenue that the Taxes Consolidation Act 1997 (TCA) provides the following reliefs for sporting bodies, including community sports clubs:
- Section 235 TCA provides for an exemption from Income Tax or Corporation Tax, as appropriate, for bodies established for the sole purpose of the promotion of athletic or amateur games or sports (“approved sporting bodies”) for so much of their income that is applied for the purpose of promoting the game or sport in question. This exemption shall be granted where it can be shown to the satisfaction of Revenue that such income is applied solely for those purposes.
- Section 847A TCA provides for a scheme of tax relief for donations to certain sports bodies for the funding of capital projects to be approved by the Minister for Tourism, Culture, Arts, Gaeltacht, Sports and Media. Bodies which apply for approval must submit both a valid tax clearance certificate and sports exemption certificate in support of this application.
A sporting body which has been granted an exemption from Income Tax and Corporation Tax under section 235 TCA, may also be exempt from other duties and taxes:
- Section 172C TCA provides that sporting bodies with an Income Tax or Corporation Tax exemption are exempt from Dividend Withholding Tax.
- Section 610A(1) TCA provides that a capital gain accruing to an approved sporting body will be exempt from Capital Gains Tax to the extent that the disposal proceeds are used for the sole purpose of promoting athletic or amateur games or sports. In the case of disposals on or after 1 January 2005, if the proceeds (or a portion thereof) are donated to a sporting body and the donation is approved by the Minister for Finance then the gain will be exempt from Capital Gains Tax in proportion to the amount that has been so donated (section 610A(2) TCA). In general, the proceeds of the disposal must be spent within five years of their receipt.
- Transfers (purchases and gifts) and leases of land to approved sporting bodies are also exempt from Stamp Duty under section 82(b) of the Stamp Duties Consolidation Act 1999, provided the land is used solely for sports purposes.
There is no general exemption from VAT for a sporting body. For VAT purposes, member-owned sports clubs are not regarded as operating in the course of business in respect of their core sporting activities. However, they are liable to VAT on bar and restaurant sales if their turnover from those activities is over the registration threshold for the supply of services (currently €37,500 per annum where the body supplies services only).
The deposit income of a sporting body is also not exempt from Deposit Interest Retention Tax.
A full list of bodies granted tax exemption under section 235 TCA is available on the Revenue website.
Whilst the various exemptions and reliefs are kept under review by my department, I have no plans at present to expand them.