Minister Donohoe welcomes payment of €5 million to charities under the Charities VAT Compensation Scheme

22nd October, 2019

The Minister for Finance and Public Expenditure & Reform, Paschal Donohoe TD today (Tuesday) welcomed that, in line with his Budget 2018 commitment, five million euro will be distributed to charitable organisations in respect of a proportion of the VAT incurred by them in the procurement of goods and services associated with their activities.

In Budget 2018 the Minister announced that, in recognition of the work undertaken by charities, he was making available a fund of €5m to compensate them for the VAT they incur on their inputs. Charities are exempt from VAT and accordingly cannot claim their inputs. The scheme started in 2018 and applies to VAT paid on qualifying expenditure on or after 1 January 2018. Charities can submit one claim per year in relation to VAT paid in the previous year. Claims can be submitted between 1 January and 30 June each year. VAT paid on expenditure in 2019 can be claimed between 1 January and 30 June 2020.

It is expected that the Revenue Commissioners will commence refunds to the charities concerned over the coming days. This means that over 1100 charities will receive some contribution towards their VAT costs that wasn’t available heretofore.

The Minister expressed his thanks to all those involved within the charities sector who have worked closely with officials in his Department and the Revenue Commissioners to bring the scheme to fruition. He said that this close co-operation would allow for the continued refinement of the administration and operation of the scheme to the benefit of the sector.