Tuesday, 24 November 2020

Questions (279)

Pat Buckley

Question:

279. Deputy Pat Buckley asked the Minister for Finance if a donation by a trust (details supplied) to a club for the completion of an all-weather pitch is not liable for taxation. [38231/20]

View answer

Written answers (Question to Finance)

I am informed by Revenue that there are a number of exemptions from Income Tax, Corporation Tax and Capital Acquisition Tax in respect of donations for sporting or charitable purposes, outlined as follows.

A gift or an inheritance which is taken for public or charitable purposes is exempt from both gift tax and inheritance tax and is not taken into account when computing tax to the extent that Revenue is satisfied that it has been, or will be, applied for purposes which in accordance with the laws of the State are public or charitable.

Section 235 of the Taxes Consolidation Act 1997 (TCA) provides for an exemption from Income Tax or Corporation Tax, as appropriate, for bodies established for the sole purpose of the promotion of athletic or amateur games or sports (“approved sporting bodies”) for so much of their income that is applied for the purpose of promoting the game or sport in question. This exemption shall be granted where it can be shown to the satisfaction of the Revenue Commissioners that such income is applied solely for those purposes. Provided the body in question has been granted the exemption from Revenue, the donation will not be subject to tax, provided the monies are used for the sole purpose of promoting the relevant game or sport. I am advised by Revenue that the body mentioned by the Deputy does not currently have an exemption under section 235 TCA; the list of bodies with such an exemption is available on the Revenue website at: https://www.revenue.ie/en/corporate/documents/statistics/registrations/sports-bodies-numeric.pdf.

Section 847A TCA provides tax relief for donations to sporting bodies in relation to capital projects specifically approved by the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media. Applications for approval to operate this scheme should be made to that Department. Bodies which apply for approval must submit both a valid tax clearance certificate and sports exemption certificate in support of this application. However, section 847A only applies to donations made by an individual or a company and would not appear to apply to the case mentioned by the Deputy.

Given the limited details provided, it will be necessary for the relevant parties involved to consider the circumstances of the transaction to determine whether the above mentioned exemptions apply to the facts and circumstances of the case.