Key Points

  • CRA registered Charities can now reclaim VAT paid on expenditure
  • Relating only to expenditure incurred on or after 1 January 2018
  • Refunds paid 1 year in arrears upon successful approval
  • Claims made through ROS and must include Audited Financial Statements for the period to which the expenses relate.
  • Funds is capped @€5m

Next Steps

  • As the fund is capped @€5m it is recommended that you close off your audit as a matter of priority so that your organisation is eligible to process the application for the refund.

The Value-Added Tax (Refund of Tax) (Charities Compensation Scheme) Order 2018 (the “Order”) was signed into law on 18 December 2018. The Order gives effect to the promise announced in Budget 2018 that a VAT Compensation Scheme for Charities (the “Scheme”) would allow charities to reclaim a proportion of their VAT costs, based on the level of non-public funding they receive.

The Scheme applies to VAT paid on expenditure on or after 1 January 2018. Refunds will be paid one year in arrears and a capped fund of €5 million is available to the scheme in 2019 (the Scheme and this cap will be reviewed after three years).

Where the total amount of claims in a given year exceeds the capped amount, charities will be paid on a pro-rata basis. For administrative purposes, claims valued below €500 will not qualify for a refund. In order to qualify for the Scheme, charities must be registered with the Charities Regulator, have tax clearance, and provide a set of audited accounts for the year in which the claim is being submitted. The charity making the claim is responsible for complying with the conditions of the Scheme. Where the secretary or trustee makes a claim on behalf of the charity, they are also responsible for complying with the conditions of the Scheme.

The facility to make claims under the Scheme is now available on Revenue’s Online Service and approved repayments are likely to issue in November in the year in which the claim is made.

If you are a trustee of a Charity or work for a Charity and need assistance with filing the VAT Refund Claim or if you need any additional information please do not hesitate to contact us.