VAT Compensation Scheme for Charities

What is qualifying expenditure and qualifying tax?

What is qualifying expenditure?

Qualifying expenditure is expenditure in respect of which a claim may be sought under this scheme. A number of conditions apply to the calculation of qualifying expenditure.

A charity may seek compensation in respect of VAT which was paid in the State on certain expenditure. That expenditure must have been for goods or services which were used by the charity solely for its charitable purpose.

If the charity used only part of the good or service for their charitable purpose, they must calculate that proportion. The part not used for their charitable purpose is not eligible for this scheme. 

A charity cannot include any amount that they are entitled to receive under any other scheme or legislation administered by Revenue. For example:

  • any kind of relief
  • refund
  • repayment
  • deductibility.

What is qualifying tax?

Qualifying tax means the VAT that has been paid by the charity on the qualifying expenditure.

Next: How do you calculate the claim amount?