Charities want €63m VAT refunded

MORE than 150 Irish charities will put intense pressure on Finance Minister Charlie McCreevy today to refund them more than €63 million collected in VAT.

The Irish Charities Tax Reform Group (ICTRG) claim the minister has the power to give them this money back by setting up a special VAT refund scheme.

But Mr McCreevy has consistently claimed he cannot return the money because it is against the Sixth EU VAT Directive. The ICTRG claims this in not accurate, as it has secured senior counsel legal advice that says it is possible for Mr McCreevy to give VAT back to charities.

“Our advice is that the Government is obliged by the EU to collect VAT, but it has the discretion to refund the VAT paid by any one group if it wants to,” an ICTRG spokeswoman said.

This is why the organisation has invited the Irish EU Commissioner, David Byrne, to address their special conference in Dublin today.

“We want the commissioner to clarify this point for us, so we can then go back to Mr McCreevy with a true picture of what the real situation is,” the ICTRG spokeswoman said. But a

Department of Finance spokesman said there were no provisions in the EU Directive which would allow for any refund of VAT.

He said charities were exempt from VAT on all monies they collected and the minister provided a new generous scheme of tax for charity donations last year. But the big problem for charities is they cannot reclaim VAT on any goods they buy or buildings they commission because they are not a registered business or an ordinary consumer. “We are losing millions every year this way on any project we undertake,” the spokeswoman added.