New Tax Relief Regime for Charitable Donations

The following analysis of the new tax relief system, as announced in Budget 2013, has been provided by The Wheel's Preferred Partner, RSM Farrel Grant Sparks.

The Minister for Finance finally announced the details of the new tax relief regime to apply to charitable donations from 1 January 2013.

The main features of this regime are as follows:

  • Blended tax refund rate to charities of 31%.
  • No distinction as to employment status of donors.
  • €1 million annual donation limit per individual (with existing lower limit of €250 per anum still applying)
  • High Earner Restriction not to apply.
  • Simplified administration process for charities and Revenue.  For example, 5 year enduring declarations.
  • Electronic refund claims to Revenue.
  • Tax refunds made to charities only after related annual tax returns filed by or on behalf of donors. 

In reality, apart from confirming the blended rate of 31% there is little change to this new regime from that announced in Budget 2012.

On the other-hand, the Minister made no mention of VAT Compensation for charities which has been a long standing issue.

Finally, the Minister had referred to the Joint Oireachtas Committee on Finance and Public Expenditure the matter of foreign donations with a view to exploring how the Irish tax system should change to facilitate recognition of such donations. 

About RSM Farrell Grant Sparks

RSM Farrell Grant Sparks is the 7th largest accounting firm in Ireland with expertise in, audit, assurance & advisory, tax, restructuring & insolvency and corporate finance and offices in Dublin, Longford and Belfast. RSM Farrell Grant Sparks is an independent firm, the result of the merger of a number of successful chartered accountancy practices.

RSM Farrell Grant Sparks is an independent member firm of the RSM International network, the 6th largest network of independent accounting and consulting firms worldwide with over 700 member firms in 90 Countries united by a common desire to provide the highest quality of services to their clients.