In collaboration with the Wheel, Charities Institute Ireland invites all members - including our Finance Directors Network - to a special webinar where Revenue will present on the VAT Compensation Scheme key features and requirements.

This is an essential update and all members are encouraged to attend.

As you are likely aware, the VAT Compensation Refund Scheme is designed to compensate charities for the VAT they incur on their inputs in recognition of the work undertaken by the charities sector.

The scheme is designed to compensate charities for a proportion of the VAT they pay on goods or services bought using non-statutory or non-public funds.

Under Irish and EU VAT law most charities are exempt from VAT, the possible exception being charities that carry on trading activities as part of their nonprofit remit. This means that most charities and nonprofits do not charge VAT on their services and cannot recover VAT incurred on goods and services that they purchase.

The Scheme is now in its 5th year and Charities Institute Ireland and The Wheel continue to liaise with Revenue on its ongoing operation. WE would like to remind and encourage charities to make claims under the Scheme – for the year ending 31 December 2022 the closing date for applications is 30 June 2023 and Revenue have asked charities to make their claims as early as possible to assist with review and processing.

Guidance on the Scheme’s rules and operation can be found at:  

• VAT Scheme Overview – Revenue Commissioners
• Guidelines Manual – Revenue Commissioners.

Qualifying Income:

We ask you to please ensure that you take care not to include public funding as qualifying income. Revenue have identified a common issue of charities incorrectly including public funding in their calculations which creates a backlog of work for Revenue and can delay the payment process. Section 5 of the Revenue Guidelines Manual provides a comprehensive note on qualifying income.