Charities losing funds to tax man through SMS donations – Ó Cuív

Published on: 02 February 2012

Mobile phone providers have been incorrectly charging VAT on charitable donations made via text message.  The Minister for Finance Michael Noonan admitted this in response to a Parliamentary Question from Fianna Fáil Deputy Leader Éamon Ó Cuív.
Deputy Ó Cuív explained, “It is becoming increasingly popular for charities to raise funds through text messages by offering the public the opportunity to send donations via text. However it has now emerged that although charitable donations are not subject to VAT, mobile phone providers have been charging VAT on donations made via text message.
“I have questioned the Finance Minister about this and he has confirmed that “donations made via SMS text message, excluding any fees charged by the telecommunications provider … are outside the scope of Irish VAT”.  
“Meanwhile, mobile phone providers have claimed that their systems they don’t have the “technical ability” to distinguish between services liable to VAT and those exempt due to their charitable status. However, under Revenue Commissioner rules, the charities are unable to reclaim the VAT that has mistakenly been charged by their service provider.
“The Minister said that he understands that the phone providers are working to resolve the issue in the near future. But the reality is that money donated by citizens to charities has wrongly wound up in the State coffers.
“I am calling on the Minister to make a donation to these charities on a once off basis in lieu of the tax incorrectly collected, which in these difficult times would make a significant difference to them.”

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