Charities and non-profit groups are exempt under the EU sixth VAT directive and under Irish VAT law. This means that they do not charge VAT on their services and cannot recover VAT incurred on goods and services that they purchase. I understand that the church in question is part of a registered charity. As an exempt body it is not possible, therefore, for the charity to recover VAT incurred in the restoration of the church. Essentially only VAT registered businesses which charge VAT are able to recover VAT. There are no provisions in the EU directive which would allow for any refund of VAT to exempt bodies. Even if VAT relief were possible, the cost to the Exchequer of a widespread VAT relief for charities and non-profit groups would be substantial, especially in the light of existing valuable tax concessions to charities, including the exemption from income tax and the availability of the uniform scheme of tax relief on donations which I included in the Finance Act, 2001.