I have found the information available on-line in relation to tax exemption for charities and non-profits hard to find and difficult to read so I hope to answer some common questions below
Q1: Does a body have to register as a Company with the companies registration office to avail of a charity tax exemption?
A: No. A body can be either be incorporated (i.e formed as a company) or be unincorporated (i.e. established by a constitution rules or a trust)
Q2: What is an unincorporated body?
A: An unincorporated body could be a trust, a society or an association. In legal terms this is no more than a group of people acting together, where they are all collectively responsible for what they do.
Q3: Is an audit required?
A: In the event of a body registering as a company limited by guarantee then yes an annual audit is always required. If a body stays unincorporated and its annual turnover stays below €100,000 then there is no legal requirement for an audit. An audit maybe required by agencies providing funding or financial institutions though.
Q4: Are charities VAT exempt?
A: There is no general exemption in respect of VAT for charities although there are some specific reliefs available from VAT
Q5: Are charities CAT exempt?
A: A gift or an inheritance which is taken for a charitable purpose will be exempted from Capital Acquisitions Tax to the extent that Revenue are satisfied that it has been, or will be, applied to purposes which are charitable in law.
Q6: What financial statements should be prepared?
A:Financial statements normally include a Statement of Income and Expenditure as well as a Statement of Assets and Liabilities.
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