CHARITABLE DONATION SCHEME CHY3
Tax Efficient Giving
If you have, or are planning to donate to the IMNDA, your gift may be dramatically increased simply by signing a form. If you donate €250 or more in one calendar year and are a PAYE-Only tax payer, the IMNDA can claim tax back on your gift, at no extra cost to you.
Under the Irish governments Tax Relief scheme, if you donated €250 throughout the year, we can claim back:
- An additional €173.73 directly from the government, if you pay tax at the higher rate
- Or a further €62.50, if you pay tax at the standard rate
The Tax Relief amount we receive back is proportional to your donations; the higher your donations, the more tax we can claim back.
|Higher Rate Taxpayer||Standard Rate Taxpayer|
€250 take-home pay
€250 take-home pay
|Charity applies to Revenue||Charity applies to Revenue|
|Charity receives additional
€174 from Revenue
|Charity receives additional
€62.50 from Revenue
|Total amount received
by Charity €424
|Total amount received
by Charity €312.50
+Further Information on Tax Efficient Giving
Section 848A Taxes Consolidation Act (TCA) 1997 provides for a uniform scheme of tax relief in respect of donations made on or after 6 April 2001 to approved bodies.
What is an ‘Approved Body’?
The list of approved bodies is set out in Part 1 of Schedule 26A to the TCA 1997 and comprise of “eligible charities”, along with a number of other specified bodies.
What is an “Eligible Charity”?
An “eligible charity” means any charity, which is authorised in writing by the Revenue Commissioners for the purposes of this Scheme. A list of eligible charities is published on Revenue’s website at www.revenue.ie under Business & Self Assessment/ Charities.
An authorisation will not issue unless the applicant charity:
• is a body of persons or trust established for charitable purposes only,
• applies its income for charitable purposes only, and
• has been assigned,
(i) a Charity (CHY) number, i.e. has been granted exemption from tax in the case of a charity established in the State, or
(ii) a Determination (DCHY) number, i.e. is in possession of a notice of determination from the Revenue Commissioners in the case of a charity established in an EEA/EFTA state (other than the State), for a period of not less than two years prior to the date of application for authorisation.
Where a charity wishes to apply for an authorisation under the Scheme it must submit a completed application form, see Appendix 1 ‘CHY AUTH’, to the Office of the Revenue Commissioners,
Collector-General’s Division, Charities Section, Government Offices, Nenagh, Co. Tipperary.
Authorisations issued under the Scheme will be valid for periods ranging up to five years and upon expiry may be renewed by making a fresh application.
The following is a list of other approved bodies for the purposes of the Scheme:
• educational institutions or bodies including primary, second level or third level, if they meet certain conditions (e.g. their programmes are approved by the Minister for Education and Skills or the institution provides courses which are validated by Quality and Qualifications Ireland,
• a body approved for Education in the Arts by the Minister for Finance,
• a body to which section 209 TCA 1997 applies, i.e. a body for the promotion of the
observance of the Universal Declaration of Human Rights or the implementation of the European Convention for the protection of Human Rights and Fundamental Freedoms, or both.
Eligible Charities and other Approved Bodies (collectively referred to hereinafter as approved bodies) availing of the Donation Scheme for the first time must complete an application for tax registration for the Donations Scheme – see Appendix 2 ‘CDS Tax Registration’.
Notes for Charities:
(i) It should be noted that such other information in addition to the application form for scheme authorisation, as may be required, must also be furnished to the Revenue Commissioners on request.
(ii) The Revenue Commissioners can make available to any person the name and address of any charity authorised for the purposes of the scheme.
(iii) An eligible charity may be required to publish such information in such manner as the Minister for Finance may reasonably require, including audited accounts.
What donations qualify for tax relief?
The minimum donation in any single year of assessment or accounting period that must be made to any one approved body in the form of money or designated securities, or a combination of money and designated securities, must be of a value of €250. Cash donations made in instalments (e.g. Standing Order) also qualify. The maximum qualifying donation amount for individuals in a year of assessment is €1m. Where there is an association between the donor (being an individual) and the approved body at the time the donation is made, e.g. where the donor is an employee or member of the approved body, the relief will be restricted to 10% of the total income of the individual for the relevant year of assessment.
A donation must also satisfy the following conditions:
• it must be in the form of money or designated securities or a combination of money and designated securities,
• it must not be repayable,
• it must not confer any benefit on the donor or any person connected with the donor,
• it must not be conditional on, or associated with, any arrangement involving the acquisition of property by the approved body.
Nature of Relief
Tax relief under section 848A TCA 1997 in respect of donations made on or after 1 January 2013 by individuals (whether self-assessed or PAYE-only taxpayers) to an approved body is allowed to the body rather than to the donor.
A donation which satisfies the conditions of section 848A is grossed up at the specified rate (currently 31%) and the approved body is deemed for the purposes of the relief to have received the grossed up amount net of tax deducted at the specified rate.
For example, Joan makes a cash donation of €1,000 to an approved body in the tax year 2013.
Under the Tax Relief Scheme the body is deemed to have received a donation of €1,449.27 (i.e. €1,000 grossed up at 31%) less tax deducted of €449.27. On the assumption that Joan has paid income tax for 2013 of at least €449.27, the approved body can obtain a refund of that amount from Revenue after the end of the tax year 2013.
The amount repaid to an approved body for any tax year cannot exceed the amount of tax paid by the donor for that year. For example, if Joan’s income tax liability for 2013 is €350 (which she has paid), the repayment to the approved body is restricted to that amount.
The individual donor must complete an “Enduring Certificate” – see Appendix 3 ‘CHY3 Cert’ or an “Annual Certificate” see Appendix 4 ‘CHY4 Cert’, and forward it to the relevant approved body to allow that body claim a refund of the tax on the grossed up amount of the donation.
The donor is not entitled to a repayment of any part of the tax that has been repaid to the approved body.
In the case of corporate donations, the company claims a deduction for the donation as if it were a trading expense or an expense of management; there is no grossing up arrangement in this case.
Company X donates €1,000 to an approved body. Assuming a corporation tax rate of 12.5%, relief to the company is €125, i.e. €1,000 @ 12.5%. While the approved body has the benefit of €1,000, the cost to the company of making the donation is only €875 (€1,000 – €125). The company will simply claim a deduction for the donation as if it were a trading expense or an expense of management, there is no grossing up arrangement and therefore no repayment claim by the approved body arises.
For repayment purposes, the details contained in the “Enduring Certificate and/or the “Annual
Certificate” must subsequently be forwarded by approved bodies to Revenue using the Revenue Online Service – ROS. Information on ROS including the registration procedures is available on the Revenue website www.revenue.ie. The claim can be submitted following the end of the tax year in which the donation is made.
You can obtain further information on the Donations Scheme from our website www.revenue.ie or from the Office of the Revenue Commissioners, Collector-General’s Division, Charity Claims Unit,
Government Offices, Nenagh, Co. Tipperary –
Phone: 067 63400 Ext. 63308/63142/63305/63190
or LoCall 1890 666 333 Ext. 63308/63142/63305/63190, Email: email@example.com or from your local Revenue Office.
While every effort is made to ensure that the information given in this leaflet is accurate, it is not a legal document. Responsibility cannot be accepted for any liability incurred or loss suffered as a consequence of relying on any matter published herein.