Dáil Éireann Debate, Wednesday - 19 January 2022
318. Deputy Catherine Murphy asked the Minister for Finance if he will clarify the position regarding an individual donor for tax relief on donations to a charity that does not currently have tax-exempt status in the State (details supplied). [1051/22]
Amharc ar fhreagraThere are no restrictions on an individual making a donation to an organisation that has tax exempt status in another country. However, I am advised by Revenue that the only organisations established outside the State which will receive tax relief from Revenue on such donations under the Charitable Donation Scheme are bodies, established in a European Economic Area (EEA) state, a European Free Trade Area (EFTA) state, or the United Kingdom, which have received a notice of determination from Revenue under section 208A Taxes Consolidation Act 1997 (TCA) at least two years before applying for authorisation under the scheme.
Section 848A TCA provides for the Charitable Donation Scheme, which is a scheme of tax relief for donations to eligible charities and other approved bodies. An “eligible charity” means any charity which is authorised in writing by Revenue for the purposes of this scheme. An authorisation will not issue unless the applicant charity:
- is a body of persons or trust established for charitable purposes only, and
- applies its income for charitable purposes only, and
- if it was a body established in the State and it has been granted exemption from tax (i.e. assigned a Charitable Tax Exemption Number (CHY)) by Revenue for a period of not less than two years prior to the date of application for authorisation or
- as outlined above, if it was a body established in an EEA State (EU countries and Iceland, Liechtenstein and Norway), an EFTA State (Iceland, Liechtenstein, Norway and Switzerland) or in the United Kingdom, it received a notice of determination from Revenue under Section 208A TCA at least two years prior to the date of the application for authorisation.
Where an individual makes a charitable donation under the scheme, the “approved body” receiving the donation can claim a refund of income tax paid by the individual at a blended 'grossed-up' rate of 31%, up to the amount of tax actually paid by the donor. The requirements of the scheme include:
- the minimum donation by an individual which qualifies for relief is €250 per annum,
- the maximum amount an individual can donate under the scheme to an approved body or approved bodies is €1 million,
- the donor or anyone connected with the donor cannot get a benefit of any kind resulting from the donation,
- the donation must not be repayable, and
- the donation must not be conditional on, or associated with, any arrangement involving the acquisition of property by the approved body.
Tax relief under section 848A TCA in respect of donations made by individuals (whether self-assessed or PAYE only taxpayers) is paid to the approved body rather than to the donor.
Further information on the Charitable Donation Scheme, including links to the list of bodies with the Charitable Tax Exemption, can be found in Revenue’s Tax and Duty Manual 36-00-17 “Charitable Donations Scheme, Tax relief for Donations to Approved Bodies” on Revenue’s website.
