VAT Rebates

Dáil Éireann Debate, Wednesday - 15 April 2015

Wednesday, 15 April 2015

Ceisteanna (165)

Thomas P. Broughan

Ceist:

165. Deputy Thomas P. Broughan asked the Minister for Finance in view of the fact that Cystic Fibrosis Ireland raised almost €9 million for hospital building projects over the past four years, of which 23% value added tax was paid to the Government, if this tax can be reimbursed to the organisation to continue with its work; and if he will provide, in tabular form, the intake from value added tax on capital projects by charity organisations, such as the hospital building projects by Cystic Fibrosis Ireland, in the years 2012 to 2014 and in 2015 to date. [14576/15]

Freagraí scríofa

Minister for Finance

I am advised by the Revenue Commissioners that VAT is a tax on consumption and is applied to supplies being made by a person and not to supplies received by a person.  VAT is an EU-wide tax and is governed by the EU VAT Directive with which the VAT legislation in each EU Member State must apply.  Where a Member State's VAT legislation is not in compliance with the EU VAT Directive the Commission will take infringement proceedings against that Member State.

 The EU VAT Directive (Council Directive 2006/112/EC) provides that Member States shall exempt in the public interest hospital and medical care or treatment provided by a hospital, nursing home, clinic or similar establishment.  Exemption from VAT means that persons engaged in exempt activities are not liable for VAT on their receipts and are not entitled to a credit or deduction for VAT borne on their purchases.  The public interest VAT-exemptions have existed since VAT was introduced, mainly because of the practical difficulties in defining and measuring the value added which would be appropriate as a base for taxation.

Non-profit groups engaged in non-commercial activity, such as fund raising, are outside the scope of VAT under the EU VAT Directive.  This means that they do not register for VAT and cannot recover VAT incurred on goods and services that they purchase.  Since they do not register for VAT the Revenue Commissioners do not hold details of VAT incurred on capital projects of the nature described by the Deputy.

There is a specific VAT Refund Order (SI 58 of 1992) that provides that VAT incurred on the purchase or importation of new medical instruments and appliances (excluding means of transport), which is purchased through voluntary donations, may be refunded to hospitals or donors, as appropriate, subject to conditions.  The Refund Order does not extend to VAT incurred on construction services.  Further information on the Refund Order, its conditions and the refund claim form VAT 72 is available on the Revenue website at  http://www.revenue.ie/en/tax/vat/forms/index.html.