Dáil Éireann Debate, Tuesday - 17 May 2022
263. Deputy Michael Healy-Rae asked the Minister for Finance if an organisation (details supplied) can receive an exemption or rebate on VAT payable on tools, materials and electricity; if commercial rates will be waived for the organisation; and if he will make a statement on the matter. [24719/22]
View answerI am advised by Revenue that the application of VAT to the supply of goods and services is subject to EU VAT law, with which Irish VAT law must comply. An entity is required to register for VAT where they make taxable supplies which exceed certain thresholds. Once VAT-registered, it is generally entitled to claim a refund of the VAT it has incurred on its various inputs and business cost. In accordance with the VAT Directive an entity that is not registered for VAT generally is not entitled to reclaim VAT they have incurred on the purchase of goods and services.
It is a fundamental feature of the EU and national VAT arrangements that the liability to VAT depends on the nature of the goods and services being supplied and it does not differ according to the circumstances of a particular customer or purchaser. There is no provision under European or Irish VAT legislation to exempt the supply of tools, materials or electricity to a particular organisation such as the one the Deputy is enquiring about.
However, the Deputy may wish to note that, alongside the VAT system, there is a grant scheme in place under which bodies which are qualifying charities may qualify for a grant in recognition of the VAT they have incurred. The VAT Compensation Scheme was introduced to reduce the tax burden on Charities by partially compensating them for the VAT incurred in delivering on their charitable purpose. Under the scheme, Charities may apply for a grant related to a proportion of their VAT costs, based on their level of funding other than from public funds and certain other sources. In order to be a qualifying charity for the scheme, an organisation would need to be registered with the Revenue Commissioners and hold a charitable tax exemption under section 207 Taxes Consolidation Act 1997 and be registered with the Charities Regulatory Authority. A fund of €5m is available annually under the Scheme. Where the eligible applications in a year exceed the capped amount of the fund, grants are paid to the qualifying charities on a pro rata basis. Detailed information regarding the VAT Compensation Scheme for Charities is available on the Revenue Commissioners website at the following link:
www.revenue.ie/en/companies-and-charities/charities-and-sports-bodies/vat-compensation-scheme/vat-compensation-scheme-for-charities/index.aspx
Finally, the Deputy has also asked about the possibility of a waiver of commercial rates. Revenue does not have a role in relation to rates, which are part of the financing of the local government sector and are dealt with at a policy level by my colleague the Minister for Housing, Local Government and Heritage, and implemented by the relevant local authorities.
