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ARTICLE · 07 FEBRUARY 2019

Charities VAT Compensation Scheme – A General Guide

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While charities in Ireland can qualify for a broad range of tax exemptions, they have no general exemption from VAT.

IrelandCorporate/Commercial Law
Eoin Tobin
Eoin Tobin
David Rodgers
David Rodgers
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Background

While charities in Ireland can qualify for a broad range of tax exemptions, they have no general exemption from VAT. This means that a charity is usually not able to reclaim the VAT it is charged which in turn reduces the funds available to it to carry out its charitable activities.

In an effort to address this problem the VAT Compensation Scheme (the "Scheme") was announced back in October 2017 as part of Budget 2018. It followed a lengthy consultation involving the Revenue Commissioners, the Charities Institute Ireland and the Department of Finance. In December 2018 the Revenue Commissioners published information and guidance for charitable bodies in respect of the operation of the Scheme.

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