Dáil Éireann Debate, Wednesday - 4 October 2023
99. Deputy Brendan Smith asked the Minister for Finance if he will consider the issues raised by a national organisation concerning taxation matters (details supplied); and if he will make a statement on the matter. [42961/23]
Amharc ar fhreagraAs the Deputy will be aware, it is a longstanding practice that the Minister for Finance does not comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.
However, the VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, unless they fall within categories of goods and services specified in Annex III of the VAT Directive, in respect of which Member States may apply a lower rate of VAT. Currently, Ireland has two reduced rates of 13.5% and 9%.
The Deputy may wish to note that charity organisations may apply to the Value Added Tax (VAT) Compensation Scheme which aims to reduce the VAT burden on charities and to partially compensate for VAT paid by charities. The scheme applies to VAT paid on expenditure in the previous year which cannot be reclaimed.
Charities can submit one claim per year, which should relate to VAT paid in the previous year only. Charities are entitled to claim a refund of a proportion of their eligible VAT costs, based on their level of non-public funding. The total amount of claims in each year may exceed the capped amount. When this happens, any refunds due are paid to charities on a pro-rata basis.
