VAT

VAT Compensation Scheme for Charities - do not miss the deadline this year!

Jarlath O'Keefe Jarlath O'Keefe

We would like to remind you that the claim for the VAT Compensation Scheme for Charities must be submitted by the 30th June 2020 for expenditure paid during 2019. Now is the time to gather the information required to prepare these claims.

It is important to note that any reference to income received or expenditure paid is to actual monies received and paid out in the calendar year to which the claim relates.

To be a qualifying charity for this scheme, a charity must at the date of claim and at the time that the qualifying expenditure was incurred:

  • be registered with Revenue and hold a charitable tax exemption under section 207 Taxes Consolidation Act 1997; and
  • be registered with the Charities Regulatory Authority.

The quantum of a claim available to a specific charity will be determined by reference to the level of non-public funding received. It is important to note that a total annual capped fund of €5 million is available for paying all claims under the scheme. Where the total claims from charities exceeds this amount, claims will be paid out on a pro-rata basis. 

Over €40 million in claims were submitted in 2019, as this exceeded the annual cap on the fund of €5 million, refunds were paid to charities on a pro-rata basis. This means that each charity received approximately 13% of the value of their claim by way of VAT refund. Revenue confirmed that refunds to over 1,100 charities were provided under the Charities VAT Compensation Scheme.

It is important to note that any reference to income received or expenditure paid is to actual monies received and paid out in the calendar year to which the claim relates.

Should you have any queries in relation to the contents of this article or would you like to discuss any indirect tax issue, please feel free to contact us.