Vol. 665 No. 2
I move amendment No. 1:
In page 8, between lines 6 and 7, to insert the following:
""body" includes an individual;".
This technical amendment is proposed on the basis of legal advice. It clarifies that all types of charitable organisations, including individuals operating as charities, are covered by the Act.
What is the purpose of this amendment?
This is a technical amendment. It recognises that many charities are quite small and may consist of just a single individual.
I appreciate the time afforded to us today by the Minister of State's officials and I am sure we will call on their expertise again during the passage of the Bill.
I have a concern about an individual being regarded as a charity. In all my days involved with various associations, I have found there always needs to be second person to approve expenditure. If an individual is granted charitable status this would be a concern. There could be concerns in rural Ireland if someone just decided to become a charity. I ask for the Minister of State's comments regarding this provision.
The legislation recognises the situation as it currently pertains. A single individual can be a trustee of a charity. The issues raised by the Deputy about accountability are further dealt with at other points in the legislation. I refer to annual reporting and so forth which would pick up on those issues, irrespective or whether it is an individual or a group. This is purely a technical amendment. It is important to note the legislation is intended in so far as possible to accommodate the existing structures of charities in the country. The issue of accountability is dealt with in some detail in other parts of the Bill.
Amendment No. 2 arises out of Committee proceedings.
I move amendment No. 2:
In page 8, line 12, to delete "that applies" and substitute the following:
"that, under its constitution, is required to apply".
Reflecting on the existing wording, it was noted that a scenario where, for example, a charity was unwittingly the victim of internal fraud by an employee or trustee and some of the property of the charity was being applied for the personal gain of that individual, the charity as a whole might be technically in breach of the Act through no fault of its own. This amendment removes any such possibility.
Amendment No. 3 arises out of Committee proceedings.
I move amendment No. 3:
In page 8, line 24, to delete "paid or".
This is a technical amendment to section 2 of the Bill for the purpose of clarity in which the phrase, "paid or" is not considered necessary on the basis of legal advice. The amendment helps to clarify the definition of charitable organisation.
Amendments Nos. 4, 33, 37, 38 are related and may be discussed together.
I move amendment No. 4:
In page 9, between lines 20 and 21, to insert the following:
""EEA Agreement" has the same meaning as it has in the European Communities (Amendment) Act 1993;
"EEA state" means—
(a) a member state of the European Communities (other than the State), or
(b) a state (other than a member state of the European Communities) that is a contracting party to the EEA Agreement.
"establishment day" shall be construed in accordance with section 11;”.
The Charities Bill as currently drafted imposes an obligation on each registered charity to have a place of business in the State. However, since Committee Stage, I have taken further legal advice from the Office of the Attorney General on the subject of regulation of foreign charities, including the appropriateness of imposing an obligation on non-Ireland based EU, EEA, EFTA, charities, to have a place of business in the State. On foot of this legal advice, a number of amendments, including these amendments, are required to allow the authority to regulate effectively in a fair and transparent manner all charities operating in the State, including those based in other countries. It would be remiss not to include these detailed provisions providing for equitable yet effective regulation. It should also be noted that organisations from outside the EU, EEA, EFTA area will be required to have a principal place of business in the State. Amendment No. 4 defines EEA agreement, EEA state and establishment day for the purpose of the Bill. Amendment No. 33 rewords the original provision to the effect that in application for registration, all charities will have to specify their principal place of business either in the State for the Irish and non-EEA charities or in the EEA country in which the EEA-based charity has its principal place of business. Amendment No. 37 provides that the authority will enter on the register the information obtained under the previous amendment. Amendment No. 38 is a technical amendment in consequence of the above amendments. The qualification, if any, is now required, because not all charities will be required to have a principal place of business in the State.
With regard to EU regulation, if a charity is collecting in this country and does not have a principal place of business in the country, it must still be treated the same as we would treat our own charities. Will these charities be able to obtain tax exemptions from the Revenue Commissioners? How will this be controlled? Has the Minister of State spoken to the Revenue on this matter? How will these charities be properly audited if they do not have their principal place of business in this State? Will there be co-operation between all the EU member states? How can we ensure these charities are living within the law in their own country? They could come here looking for tax exemptions or collecting in this country and may not be obeying the law in their own land.
On the matter of audit and tax clearance certificates, registration with Revenue always remains a separate matter for the Revenue Commissioners. This amendment does not change that obligation in any way. It will be required. The changes proposed for the EU-registered charities impose an obligation for each of them to have a place of residence in the State. Revenue currently requires all charities seeking charitable tax exemption to have a physical presence in this jurisdiction but this is a separate matter for Revenue. However, on the basis of the legal advice, the requirement that these charities have a physical and legal presence in Ireland is to be removed. An approach to the regulation of non-Irish charities, taking into account the requirement of equality of treatment of all EU, EEA, EFTA-based charities, has been developed in discussions with the Office of the Attorney General and the Department of Finance. The Bill is to be amended on that basis. It should be noted that charities from outside this area will be required to have a legal presence in this jurisdiction.
