Written Answers. - Charities' VAT Rebate.

Ivor Callely

Question:

76 Mr. Callely asked the Minister for Finance the consideration, if any, that has been given to the extension of concessions, exemptions and the making of refund orders to charities and voluntary organisations that may be liable for VAT on products and equipment used in an exceptional way by such charities and voluntary organisations in our communities; and if he will make a statement on the matter. [17974/95]

Any consideration of extending concessions to charities and voluntary organisations in relation to their liability for VAT is constrained by the fact that Irish law in this area must conform to EU VAT law. The present situation, whereby charities and other voluntary organisations bear VAT on the equipment etc. they purchase, is a direct consequence of the Sixth VAT Directive. It provides that most charitable activities are exempt from VAT: this means that bodies engaged in such activities do not charge VAT on the services they provide. However, as a necessary corollary, neither are they entitled to recover the tax borne on the goods and services they purchase in the course of these activities. Generally speaking, VAT can only be recovered by VAT-registered businesses.