Posted by Revenue eBrief No. 072/21
Charities VAT Compensation Scheme
The Charities VAT Compensation Scheme Guidelines have been updated.
These Guidelines have been updated at Section 4 to include information on the treatment of Covid-19 wage subsidy scheme payments for the purposes of calculating a VAT Compensation Scheme claim.
Further clarification on the calculation of ‘Total Income’ and ‘Qualifying Income’ has also been provided in Sections 5 and 6.
Information about this scheme is available on www.revenue.ie.
Extract:
1.2 VAT Compensation Scheme overview
To reduce the VAT burden on charities and to partially compensate for VAT paid in the day to day running of the charity, a VAT Compensation Scheme for charities has been introduced. The scheme applies to tax paid on expenditure on or after 1 January 2018 and so VAT paid in years prior to that cannot be claimed. Refunds will be paid one year in arrears.
A total annual capped fund of €5m is available for payment under the scheme, and the scheme will be subject to review after three years. Charities will be entitled to claim a refund of a proportion of their VAT costs based on the level of non-public funding they receive. Where the total amount of eligible claims from all charities in each year exceeds the capped amount, claims will be paid on a pro rata basis.
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