The latest news on philanthropy in Ireland is available in this section. Click here for details on upcoming events.
The issue of VAT paid by charities received very significant coverage on RTE’s Liveline (Joe Duffy) show last Friday, with a number of charities and the ICTR on air explaining the issue. Click here to listen to ICTR explain its proposals for VAT compensation (fast forward to 43.19 mins into the show on Friday 15th January 2010)
There is now an opportunity for charities to continue to highlight this issue to government in the run- up to the Finance Bill and to build momentum towards achieving a compensation scheme.
The ICTR is calling on the government to initiate discussions between the Department of Finance, Revenue and the charity sector to allow an agreement be reached to resolve the anomaly of unrecoverable VAT. Such a process led to the successful introduction of an agreed VAT Compensation scheme in Denmark recently.
In the last Budget the Minister for Finance indicated that he will be examining taxation issues again for the Dec 2010 Budget (having concentrated mainly on expenditure reductions in Dec 2009). The government had previously indicated a willingness to examine the VAT issue for charities but it became deferred due to the sudden economic downturn.
Furthermore the European Commission has decided to undertake a major review of VAT in the EU, work on this will commence during 2010. The Irish government and ICTR through ECCVAT (European Charities Committee on VAT) will have an input to this review, which is likely to be substantially undertaken before the scheduled date for the next General Election (June 2012).
Charities are urged to undertake the following:
* Designate a person in charge of VAT and VAT Compensation issues
* If not already doing so identify the level of VAT paid by the charity or, at a minimum, the five largest expenditure items that attract unrecoverable VAT in your charity.
* Utilise any contacts with government Ministers to highlight the impact of VAT on your charity. Include a paragraph on the impact of unrecoverable VAT in any financial or grant submissions to government
* Phone, write, email, or otherwise canvass TDs whom you are in contact with, emphasising the unfairness of the VAT ‘levy’ on charities. Ask for their support.
* Include data on the impact of unrecoverable VAT on your charity’s website.