Catherine Murphy (Kildare North, Social Democrats)
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261. To ask the Minister for Finance if schools can claim a VAT rebate in the context of being in possession of a charity number. [22586/22]

Catherine Murphy (Kildare North, Social Democrats)
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267. To ask the Minister for Finance his views in relation to allowing all schools to claim VAT back in the same way as other entities with charity numbers; the estimated costs involved; and if he will make a statement on the matter. [22689/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 261 and 267 together.

I am advised by Revenue that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply.  In accordance with the VAT Directive a school that is engaged solely in the provision of children’s or young people’s education is exempt from VAT. As is the case with all VAT exempt activities, this means that they are not required to charge VAT on their supply of the relevant services, nor are they entitled to reclaim VAT on their purchases used for the services.  This is a fundamental feature of the VAT regime at EU and national level.

However, alongside the VAT system, there is a grants scheme under which bodies (including schools) which are qualifying charities may qualify for a grant in recognition of the VAT they have incurred.  The VAT Compensation Scheme was introduced in recent years to reduce the tax burden on Charities by partially compensating them for the VAT incurred in delivering on their charitable purpose. Under the scheme, charities may apply for a grant related to a proportion of their VAT costs, based on their level of funding other than from public and certain other sources. In order to be a qualifying charity for the scheme, a school would need to be registered with the Revenue Commissioners and hold a charitable tax exemption under section 207 Taxes Consolidation Act 1997, and be registered with the Charities Regulatory Authority. It’s qualifying income would exclude income from public sources and educational fees. A total annual capped fund of €5m is available under the Scheme. Where the total amount of eligible applications from all Charities in a year exceeds the capped amount, grants are paid on a pro rata basis. Detailed information regarding the VAT Compensation Scheme for Charities is available on the Revenue Commissioners website at the following link: www.revenue.ie/en/companies-and-charities/charities-and-sports-bodies/vat-compensation-scheme/vat-compensation-scheme-for-charities/index.aspx.

Finally, I am advised that the information required to estimate the cost of the Deputy’s suggestion to allow all schools to reclaim VAT is not readily available as Revenue do not have data about their purchases.

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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262. To ask the Minister for Finance the preparation work that has been carried out to enable a new vacant property tax to be introduced in 2022; and if he will make a statement on the matter. [22597/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Government’s strategy ‘Housing For All’ includes an action for my Department to collect data on vacancy with a view to introducing a Vacant Property Tax. The timeframe for delivery on this commitment is the second quarter of 2022. The Finance (Local Property Tax) (Amendment) Act 2021 enabled Revenue to collect certain information in relation to the occupancy status of  residential properties including, where unoccupied, the duration and reason for this, in the Local Property Tax (LPT) return forms submitted by residential property owners in respect of the new LPT valuation period 2022-2025. This information, together with information from other available sources, will be used to assess the merits and impact of introducing a Vacant Property Tax.

In considering the case for such a tax it is important to have a sound understanding of the quantity, locations and characteristics of long-term vacant properties. It is also essential to identify the reasons for vacancy, and whether this is long or short-term in nature. There may be genuine and acceptable reasons for vacancy such as refurbishment work, the temporary absence of the owner for medical reasons or pending the grant of probate for a deceased person’s estate.

Revenue have completed a preliminary analysis of the LPT returns received to date which has been shared with my Department. The results of the preliminary analysis suggest that levels of vacancy are low across all counties. I will consider the issue in consultation with colleagues before reverting to Government with proposals on the appropriate response. I understand Revenue intends to publish a profile of the occupancy data from the LPT returns in due course.

Addressing vacancy and dereliction, and maximising the use of the existing housing stock, is a priority objective of the Government, as evidenced in the Housing for All strategy where one of the four pathways in the plan is specifically dedicated to this area.