Cathal Crowe (Clare, Fianna Fail)
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238. To ask the Minister for Finance if his Department will address the current VAT regime that charities are subject to; and if he will make a statement on the matter. [14128/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy is aware, the VAT Compensation Scheme for Charities was introduced in Budget 2018 to reduce the tax burden on Charities and partially compensate them for the VAT incurred in delivering on their charitable purpose. 

A total annual capped fund of €5m is available for payment under the Scheme and where the total amount of eligible claims from all Charities in a year exceeds the capped amount, claims are paid on a pro-rata basis.

A review was undertaken of the operation of the scheme after its third year and a copy of the review is available as an annex in the Tax Strategy Group paper on VAT published in 2021. The paper can be found at www.gov.ie/en/collection/d6bc7-budget-2022-tax-strategy-group-papers/.

On foot of this review, and on the basis of a request by the charity sector, to future proof the scheme to ensure no single claim disproportionately draws on the Scheme in favour of any one charity, I introduced a maximum claim amount of €1m.

Any future changes in the operation of the scheme will be considered as part of the normal budgetary process.