Frequently Asked Questions - Charities
- What is Revenue's role in relation to charities?
- How should I set up a charity?
- How should a governing document define an organisation’s purposes?
- What are charitable purposes?
- How do I apply for charitable tax exemption?
- Does a charity have to apply for a tax exemption from the Revenue Commissioners?
- Will Charities Section advise upon draft governing documents?
- What reliefs from tax are available on the income and property of charities?
- We are a not for profit organisation; does that mean we are a charity and entitled to tax exemption?
- We are an unincorporated body and have been advised to change the legal structure of the organisation to an incorporated body governed by Memorandum and Articles of Association; will this affect charitable tax exemption?
- Can a foreign charity be granted charitable tax exemption /determination in Ireland?
- Can an Officer/Director/Trustee be paid as an Officer/Director/Trustee?
- Can an organisation that has charitable tax exemption have paid employees?
- Is an organisation that has been granted charitable tax exemption exempt from VAT?
- Can an organisation that has been granted charitable tax exemption avail of an exemption from Local Property Tax?
- We have charitable tax exemption; do we still need to get a tax clearance certificate?
- Does a body with charitable tax exemption have to renew its tax exemption?
- Can charitable tax exemption be withdrawn?
- What accounts does a body with charitable tax exemption need to keep?
- Our charity is dissolving; what information/documentation do we have to provide to the Revenue Commissioners?
- What tax reliefs apply in the case of donations to charities?
- Is there a register of charities in Ireland?
The Office of the Revenue Commissioners, Charities Section maintains a database of organisations to which they have granted charitable tax exemption. In granting tax exemption Charities Section give the body a CHY reference number. The full list of bodies granted exemption is published on the Revenue website.
All charitable organisations, if applying for tax exemption require a legal structure and a governing instrument. The form of governing instrument best suited to the function of any charity depends very much on the charitable purposes, the planned activities of the charity and how it is proposed to fund these activities.
Charitable organisations mainly take one of three legal forms:
- An unincorporated association with a Constitution or Rules;
- A charitable trust established by Trust Deed;
- A company governed by a Memorandum and Articles of Association.
It is recommended that intending charities take their own advice on this issue.
An organisation must be constituted and operated exclusively for charitable purposes. In addition, it is a basic principle of charity law that an organisation’s objects must be expressed in precise rather than broad or vague terms. This identifies as clearly as possible a recognised charitable purpose.
Exemption to tax will not be granted to organisations that have a mix of charitable and non-charitable purposes or where the objects of the body are considered to be either too vague or too broad.
In accordance with section 3 (1) of the Charities Act 2009 each of the following shall be a charitable purpose:
- Trusts for the Relief of Poverty
- Trusts for the Advancement of Education
- Trusts for the Advancement of Religion
- Trusts for Other Purposes Beneficial to the Community
A purpose shall not be a charitable purpose unless it is of public benefit.
It is not unusual for a charitable body to come within more than one of the headings. It should be noted that not all purposes of benefit to the community would be considered a charitable purpose. In examining an application for tax exemption the Charities Section will examine the case with regard to the objects, the actual activity of the applicant body and with regard to established charity case law.
Where a charitable organisation wishes to apply for exemption, it must submit a completed application form, CHY1 - Applying for Relief from Tax on the Income and Property of Charities (PDF, 321KB) to Charities Section, Office of the Revenue Commissioners, Nenagh, Co. Tipperary. The following documents should be submitted in support of the application: -
- Copy of the governing instrument - in draft format for a charity being newly formed.
- Statement of activities to date and plans for next 12 months, including any trading activities being undertaken/proposed.
- Annual reports and other documentation, if applicable.
- Latest financial statements/projected income and expenditure.
- List of names, addresses, occupations and PPS numbers of the Officers/Trustees/Directors.
No, it is only necessary for a charity to apply to the Revenue Commissioners for charitable tax exemption if it may incur a liability to tax.
Yes, provided that a completed CHY1 and supporting documentation are submitted with the draft document. In order that organisations can alleviate costs in time and money, Charities Section is prepared to consider draft governing instruments. In considering whether a body might qualify for exemption to tax, all other documents and information required on the application form must also be provided. If all is in order Charities Section will advise the applicant to finalise the governing documentation in order to proceed with the granting of the claim to tax exemption.
The tax code provides exemptions for charities as follows:
- Income Tax - Sections 207 and 208, Taxes Consolidation Act, 1997.
- Corporation Tax (in the case of companies) - Sections 76 and 78 Taxes Consolidation Act, 1997.
- Capital Gains Tax - Section 609, Taxes Consolidation Act, 1997.
- Deposit Interest Retention Tax (DIRT) - Section 266 Taxes Consolidation Act, 1997.
- Capital Acquisitions Tax - Sections 17, 22 and 76 of the Capital Acquisitions Taxes Consolidation Act 2003.
- Stamp Duty - Section 82, Stamp Duties Consolidation Act 1999.
- Dividend Withholding Tax - Chapter 8A, Part 6, Taxes Consolidation Act, 1997.
- Local Property Tax - Sections 7 and 7A Finance (Local Property Tax) Act 2012.
We are a not for profit organisation; does that mean we are a charity and entitled to charitable tax exemption?
No, the absence of profit motivation does not automatically make a charity entitled to charitable tax exemption. In examining an application for charitable tax exemption the Charities Section will examine the case with regard to the objects, the actual activity of the applicant and case law.
We are an unincorporated body and have been advised to change the legal structure of the organisation to an incorporated body governed by Memorandum and Articles of Association; will this affect charitable tax exemption?
No, if the ethos of the organisation does not change then a body that wishes to change its legal structure should write to Charities Section prior to the change, notifying us of the reason for the proposed change and enclosing a copy of the new draft governing instrument.
Non-resident charities based in an EEA / EFTA country can apply for a determination under Sections 208A and 208B of the Taxes Consolidation Act 1997.
Eligible non-resident charities will qualify for a determination rather than an exemption. A determination will issue following evaluation of the application from the non-resident charity on the basis that it is established for charitable purposes only and were the body to have income in the state of a kind referred to in section 207 or 208 it would qualify for the exemptions provided for by those sections.
Where a non-resident charitable organisation wishes to apply for a determination, it must submit a completed application form to Charities Section, Office of the Revenue Commissioners , Nenagh, Co. Tipperary, Ireland. Download the information leaflet DCHY 1 and application form (PDF, 330KB) .
In general, no payments should be paid to Officers/Directors/Trustees other then out of pocket expenses. Specifically, Officers/Directors/Trustees are not to be paid for holding such an office.
Yes, a charity can have paid employees. A charity that has employees should note that charitable tax exemption does not relieve it of its obligations as an employer to operate the P.A.Y.E. system for its employees. Officers/Directors/Trustees of the charity are prohibited from being employed by or in receipt of any remuneration from the charity.
No. There is no general VAT exemption for charities. However, there are a number of specific reliefs from VAT which may relate to charitable activities and are outlined in information leaflet: VAT and Charities.
Can an organisation that has been granted charitable tax exemption avail of an exemption from Local Property Tax (LPT)?
Under the provisions of Sections 7 and 7A Finance (Local Property Tax) Act 2012 in the following circumstances, residential properties may be exempt from Local Property Tax:
- Residential properties owned by a charity, which has been granted charitable tax exemption under the provisions of Section 207 or 208 Taxes Consolidation Act 1997 or given a notice of determination under Section 208A Taxes Consolidation Act 1997, and which property is used to provide special needs accommodation and support for people who have a particular need in addition to a general housing need to enable them to live in the community such as sheltered accommodation for the elderly or the disabled.
- Residential properties, where the liable person in relation to the property is a charity, which has been granted charitable tax exemption under the provisions of Section 207 or 208 Taxes Consolidation Act 1997 or given a notice of determination under Section 208A Taxes Consolidation Act 1997 and which property is used solely as residential accommodation in connection with the facilitation of recreational activities in the course of the actual carrying out of a primary purpose of the charity e.g. guiding and scouting activities.
Bodies granted charitable tax exemption by the Revenue Commissioners are issued with a Charity (CHY) Number. In certain instances it may be sufficient for a body just to quote their CHY number and a tax clearance certificate would not be a requirement.
An applicant with charitable tax exemption who has secured a Public Sector Contract or requires tax clearance in connection with an application for the renewal of an Excise Licence or certain other licences (including authorisation required under the Consumer Credit Act 1995 and the Criminal Justice Legal Aid (Tax Clearance Regulations 1999) should apply on form TC1 Application for Tax Clearance Certificate form (PDF, 258KB) for a general tax clearance certificate.
No. However, a charity must adhere to the conditions attaching to that exemption and is subject to review by Charities Section.
Yes, tax exemption may be withdrawn (retrospectively if necessary) if the body does not comply with its charitable objects or to the conditions associated with the charitable tax exemption. In such circumstances a charge to tax as determined by the Revenue Commissioners may be raised.
Annual Accounts must be kept and made available to the Revenue Commissioners on request. In the case of a body with income in excess of €100,000 per annum audited accounts must be submitted.
Our charity is dissolving; what information/documentation do we have to provide to the Revenue Commissioners?
- The date the organisation ceases to exist officially
- Final set of accounts of the organisation
- Confirmation of how any residual funds, at the time of dissolution, were distributed.
All the information that you need is contained in our publication CHY 2 available on our website at: CHY2 - Scheme of Tax Relief for Donations of Money or Designated Securities to 'Eligible Charities'and other 'Approved Bodies' Under Section 848a Taxes Consolidation Act 1997 (PDF, 382KB)
For donations made after 1st January 2013, the information that you need is contained in our publication CHY 3 available on our website at: CHY3 - Scheme Of Tax Relief under Section 848A Taxes Consolidation Act 1997 for Donations of Money or Designated Securities made on or after 1 January 2013 to "Eligible Charities" and other "Approved Bodies" (PDF, 739KB).
The Charities Regulatory Authority was legally established on the 16th of October 2014 under the Charities Act 2009. The Authority will maintain a register of charities. Further details available on the Charities Regulatory Authority website.
Office of the Revenue Commissioners
Telephone No. 00 353 67 63377
Fax: 067 32916
Lo call: 1890 66 63 33
It should be noted that the Revenue Commissioners can make available to any person the name and address of any charity which has been granted exemption from tax.
Last Updated: March 2015