Dáil Éireann Debate, Thursday - 25 May 2023
130. Deputy Pearse Doherty asked the Minister for Finance if he is aware that VAT is applied to the directive charitable donations of goods; if it is possible to introduce a VAT waiver on such donations to support households in the context of the high cost of living, reduce waste and support the circular economy. [25459/23]
View answerI am advised by Revenue that the VAT treatment of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the Directive provides that all goods and services are liable to VAT at the standard rate unless they are exempt from VAT or fall within Annex III of the Directive, in respect of which Member States may apply reduced rates of VAT.
Under the Directive, gifts or donations of small value are not subject to VAT. In Ireland, no VAT is charged where the cost to the donor of the gift or donation does not exceed twenty euro (excluding VAT). However, where a fee is charged or if the cost to the donor of the gift or donation exceeds twenty euro, the gift or donation will be liable to VAT at the rate appropriate to that good. In addition, where the supply of the gift or donation forms part of a series of gifts or donations to the same person over a period of time then the gifts or donations are liable to VAT.
Further guidance on the VAT treatment of gifts is available on the Revenue website - www.revenue.ie/en/tax-professionals/tdm/value-added-tax/part03-taxable-transactions-goods-ica-services/Goods/goods-gifts-and-promotional-items-etc.pdf
