The Irish government’s decision in its recent 2018 budget statement will provide charities with an incentive to increase fundraising efforts, according to Charities Institute Ireland.
Under the new tax regulations charities will be entitled to a refund of a proportion of their VAT costs based on the level of non-public funding they receive. For example, where a charity’s gross income for 2018 involves 30% funding from State/EU/international organisations and 70% privately sourced income including fundraising, subscriptions and donations, they may claim 70% of their VAT input costs for the year.
A capped fund of €5 million will be available to the scheme in 2019. The scheme, including the amount provided in the fund, will be subject to review after three years. Claims under the scheme cannot be made until 2019 as it will take some time for Revenue to establish IT and administrative systems.
‘Irish Charities have campaigned for this type of scheme for many years and today represents a major breakthrough,’ Lucy Masterson, Charities Institute Ireland‘s Chief Executive said.
‘It was the reason ICTRG (Irish Charities Tax Reform Group) was established over fifteen years ago and has been a core part of the ICTR / Charities Institute Ireland advocacy agenda since day one’, she added.
Photo: VAT (Value Added Tax) – Imagentle on Shutterstock.com
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