VAT Compensation Scheme for Charities

Overview

The Value Added Tax (VAT) Compensation Scheme aims to reduce the VAT burden on charities and to partially compensate for VAT paid by the charity. The scheme applies to VAT paid on expenditure on or after 1 January 2018. VAT paid in years prior to that cannot be claimed.

Charities can submit one claim per year, which should relate to VAT paid in the previous year only. 

Claims can only be submitted between 1 January and 30 June each year.

Claims made under this scheme are not dealt with on a first come, first served basis. 

The fund for the scheme will be capped at €5 million annually. This scheme will be reviewed after three years. 

Charities are entitled to claim a refund of a proportion of their eligible VAT costs, based on their level of non-public funding. 

The total amount of claims in each year may exceed the capped amount. If this happens, any refunds due will be paid to charities on a pro-rata basis.

Next: Qualifying conditions and supporting documentation