# New tax proposals to benefit Irish charitable giving

- Link: https://fundraising.co.uk/2012/02/28/new-tax-proposals-to-benefit-irish-charitable-giving/
- Published: 2012-02-28T08:25:00+00:00
- Author: Howard Lake

**The Irish government has announced a significant new initiative to further support
planned giving involving simplifying the rules governing tax relief on charitable
donations, according to the Irish Charity Tax Reform Group (ICTR).**

The proposals have emerged from detailed discussions between [ICTR](http://www.ictr.ie),
the Revenue Commissioners and the Department of Finance following the election of
the new government last year.

The government proposal involves a new composite rate of tax relief on charitable
donations of ‘around 30%’ to replace existing higher and standard rates, with the
benefit of the tax relief in all cases going to the charity i.e. from now on PAYE
and self-assessed taxpayers will be treated the same with charities benefiting from
the tax refund in all cases.

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The Report of the Commission on Taxation supported treating all donors the same 
but had proposed to standardise relief on charitable donations (i.e. 20%). The Commission,
however also stated that “there is a general benefit to society from donations to
charities… the state should continue to support this activity.”

ICTR successfully argued that such a rate would dis-incentivise giving by the public
and seriously undermine the financial ability of charities to respond to the needs
of the most vulnerable in society.

The proposed new composite rate is a major achievement in this context. Given that
the benefit of the relief will in future go to the charity in all cases, the sector
will receive an opportunity to boost donations and income from this source.  Also,
now that the tax benefit from donations will go to the charity the tax relief scheme
on donations will no longer be subject to the “higher earner” limitation on the 
amount of cumulative tax relief that can be claimed by individual taxpayers in any
tax year. Instead the donations scheme will be capped at €1m.

The proposals are subject to a three-month consultation period, beginning immediately,
during which charities and others may make comments and suggestions to fine-tune
or improve the proposals. It is intended that the specific terms will be formally
announced in next December’s Budget and become operative from January 2013.

The Minister for Finance has also signalled his attention to address the long-running
issue of VAT Compensation for charities.

 * **[New Irish charity tax relief details revealed](https://fundraising.co.uk/2013/07/30/new-irish-charity-tax-relief-details-revealed/)**(
   30 July 2013)
 * **[CAF handles a record £478 million in donations in 2014/15](https://fundraising.co.uk/2015/08/03/caf-handles-a-record-478m-in-donations-in-201415/)**(
   3 August 2015)
 * **[Donated shares provide £600,000 for Irish charities](https://fundraising.co.uk/2016/07/18/donated-shares-provide-600000-irish-charities/)**(
   18 July 2016)