Vol. 553 No. 3
59 Ms McManus asked the Minister for Finance if he will make the necessary changes to ensure a fairer VAT refund mechanism for charities in view of the fact that this sector pays up to ?63 million in VAT each year; and if he will make a statement on the matter. [14005/02]
I am aware of the campaign currently being run by the Irish Charities Tax Reform Group. The current VAT treatment of charitable organisations is based on EU VAT law, with which Irish law must comply. Under the sixth VAT directive a wide range of charitable and voluntary activities are deemed to be exempt for VAT purposes. This means that the organisations involved do not charge VAT on their services but, as a necessary corollary, they are unable to recover the VAT they bear on the goods and services that they purchase in the course of their activities. It is estimated that the cost of any refund mechanism as proposed by the ICTRG would be significantly in excess of €63 million.
