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Finance Act, 2001

Donations to approved bodies, etc.

45.—(1) Part 36 of the Principal Act is amended by the insertion of the following after section 848—

“Donations to approved bodies.

848A.—(1) (a) In this section—

‘appropriate certificate’, in relation to a relevant donation by a donor who is an individual, other than an individual referred to in subsection (7), to an approved body, means a certificate which is in such form as the Revenue Commissioners may prescribe and which contains—

(i) statements to the effect that—

(I) the donation satisfies the requirements of subsection (3), and

(II) the donor has paid or will pay to the Revenue Commissioners income tax of an amount equal to income tax at the standard rate or the higher rate or partly at the standard rate and partly at the higher rate, as the case may be, for the relevant year of assessment on the grossed up amount of the donation, but not being—

(A) income tax which the donor is entitled to charge against any other person or to deduct, retain or satisfy out of any payment which the donor is liable to make to any other person, or

(B) appropriate tax within the meaning of Chapter 4 of Part 8,

(ii) a statement specifying how much of the grossed up amount referred to in subparagraph (i)(II) has been or will be liable to income tax at the standard rate and the higher rate for the relevant year of assessment, and

(iii) the identifying number, known as the Personal Public Service Number (PPSN), of the donor;

‘approved body’ means a body specified in Part 1 of Schedule 26A;

‘relevant accounting period’ in relation to a relevant donation means the accounting period in which the relevant donation is made;

‘relevant donation’ means a donation which satisfies the requirements of subsection (3) and takes the form of the payment by a person (in this section referred to as the ‘donor’) of a sum or sums of money amounting to at least £200 to an approved body which is made—

(i) where the donor is a company, in an accounting period, and

(ii) where the donor is an individual, in a year of assessment;

‘relevant year of assessment’, in relation to a relevant donation, means the year of assessment in which the relevant donation is made.

(b) For the purposes of this section and in relation to a donation by a donor who is an individual (other than an individual referred to in subsection (7)), references to the grossed up amount are to the amount which after deducting income tax at the standard rate or the higher rate or partly at the standard rate and partly at the higher rate, as the case may be, for the relevant year of assessment leaves the amount of the donation.

(c) This section shall be construed together with Schedule 26A.

(2) Where it is proved to the satisfaction of the Revenue Commissioners that a person has made a relevant donation the provisions of subsection (4), subsection (7) or subsection (9), as the case may be, shall apply.

(3) A donation will satisfy the requirements of this section if—

(a) it is not subject to a condition as to repayment,

(b) neither the donor nor any person connected with the donor receives a benefit in consequence of making the donation, either directly or indirectly,

(c) it is not conditional on or associated with, or part of an arrangement involving, the acquisition of property by the approved body, otherwise than by way of gift, from the donor or a person connected with the donor,

(d) subject to subsection (4)—

(i) it would not be deductible in computing for the purposes of corporation tax the profits or gains of a trade or profession, and

(ii) it would not be an expense of management deductible in computing the total profits of a company,

(e) in respect of a donation made by an individual, the individual—

(i) is resident in the State for the relevant year of assessment,

(ii) has, except in the case of an individual referred to in subsection (7), given an appropriate certificate in relation to the donation to the approved body, and

(iii) has, except in the case of an individual referred to in subsection (7), paid the tax referred to in such appropriate certificate and is not entitled to claim a repayment of that tax or any part of that tax.

(4) Where a company makes a relevant donation in any accounting period and claims relief from tax by reference thereto, the amount thereof shall, for the purposes of corporation tax, be treated as—

(a) a deductible trading expense of a trade carried on by the company in, or

(b) an expense of management deductible in computing the total profits of the company for,

that accounting period.

(5) A claim by a company under this section shall be made with the return required to be delivered under section 951 for the accounting period in which the relevant donation is made.

(6) Where a relevant donation is made by a donor in an accounting period of a company or in a year of assessment which is less than 12 months, the amounts specified in the definition of ‘relevant donation’ shall be proportionately reduced.

(7) Where a relevant donation is made to an approved body in a year of assessment by an individual who is a chargeable person (within the meaning of Part 41) for the year of assessment, the amount of the donation shall be deducted from or set off against any income of the individual chargeable to income tax for that year of assessment and tax shall where necessary be discharged or repaid accordingly, and the total income of the individual or, where the individual's spouse is assessed to income tax in accordance with section 1017, the total income of the spouse shall be calculated accordingly; but any such deduction or set-off shall not be taken into account in determining the net relevant earnings (within the meaning of section 787) of the individual or, as the case may be, the individual's spouse for the year of assessment.

(8) Where a relevant donation is made to an approved body by an individual who is a chargeable person (within the meaning of Part 41) a claim under this section shall be made with the return required to be made by that individual under section 951 for the year of assessment in which the donation is made.

(9) Where a donation is a relevant donation made by a donor who is an individual (other than an individual referred to in subsection (7) to an approved body, the Tax Acts shall apply in relation to the approved body as if—

(a) the grossed up amount of the donation were an annual payment which was the income of the approved body received by it under deduction of tax, in the amounts and at the rates specified in the statement referred to in paragraph (ii) of the definition of ‘appropriate certificate’ for the relevant year of assessment, and

(b) the provisions of those Acts which apply in relation to a claim to repayment of tax applied in relation to any claim to repayment of such tax by an approved body;

but, if the total amount of the tax referred to in paragraph (ii) of the definition of ‘appropriate certificate’ is not paid, the amount of any repayment which would otherwise be made to an approved body in accordance with this section shall not exceed the amount of tax actually paid by the donor.

(10) The details contained in an appropriate certificate shall be given by the approved body to the Revenue Commissioners in an electronic format approved by the Revenue Commissioners in connection with the making of a claim to repayment of tax to which subsection (9)(b) refers and where it is so given it shall be accompanied by a declaration made by the approved body, on a form prescribed or authorised for that purpose by the Revenue Commissioners, to the effect that the details are correct and complete.

(11) Where the Revenue Commissioners are satisfied that an approved body does not have the facilities to give the details contained in an appropriate certificate in the electronic format referred to in subsection (10), such details shall be given in writing in a form prescribed or authorised by the Revenue Commissioners and shall be accompanied by a declaration made by the approved body to the effect that the claim is correct and complete.

(12) Section 764 shall apply as if subsection (1)(b) were deleted and subsection (2) shall be construed accordingly.

(13) Section 88, 484, 485, 485A, 485B, 486, 486A and 767, subparagraphs (ii) and (iii) of subsection (1)(b), and subsection (3), of section 792 and section 848 are repealed.

(14) Where any body to which Part 2 or Part 3 of Schedule 26A relates has been approved or is the holder of an authorisation, as the case may be, under any enactment and, that approval or authorisation has not been withdrawn on the day prior to the coming into operation of this section, such body shall be deemed to be an approved body for the purposes of this section.”.

(2) Chapter 1 of Part 15 of the Principal Act is amended by the substitution in Part 2 of the Table to section 458 of “section 848A(7)” for “section 485A(4)”.

(3) In respect of a donation made on or after 1 January 2002, m“relevant donation” in subsection (1)(a) of section 848A of the Principal Act (inserted by subsection (1)) is amended by the substitution of “€250” for “£200”.

(4) The Principal Act is amended by the insertion of the following after Schedule 26:

Section 848A.

SCHEDULE 26A

PART 1

List of approved bodies for the purposes of section 848A

1. A body approved for education in the arts in accordance with Part 2.

2. A body approved as an eligible charity in accordance with Part 3.

3. An institution of higher education within the meaning of section 1 of the Higher Education Authority Act, 1971 , or any body established in the State for the sole purpose of raising funds for such an institution.

4. An institution in the State in receipt of public funding which provides courses to which a scheme approved by the Minister for Education and Science under the Local Authorities (Higher Education Grants) Acts, 1968 to 1992, applies or any body established in the State for the sole purpose of raising funds for such an institution.

5. An institution of higher education in the State which provides courses which are validated by the Higher Education Training and Awards Council under the provisions of the Qualifications (Education and Training) Act, 1999 .

6. An institution or other body in the State which provides primary education up to the end of sixth standard, based on a programme prescribed or approved by the Minister for Education and Science.

7. An institution or other body in the State which provides post-primary education up to the level of either or both the Junior Certificate and the Leaving Certificate based on a programme prescribed or approved by the Minister for Education and Science.

8. STEIF which is the Scientific and Technological Education (Investment) Fund established under the Scientific and Technological Education (Investment) Fund Act, 1997 (as amended by the Scientific and Technological Education (Investment) Fund (Amendment) Act, 1998 ).

9. The company incorporated under the Companies Acts, 1963 to 1990, on 20 September 1990 as First Step Limited.

10. The Malting Research Committee of the Irish Malters Association.

11. The European Research Institute of Ireland.

12. The Equine Foundation.

13. The Dun Research Foundation.

14. The Institute of Ophthalmology.

15. The Mater College for Research and Postgraduate Education.

16. St. Luke's Institute of Cancer Research.

17. A body to which section 209 applies which is 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 the promotion of the observance of that Declaration and the implementation of that Convention.

18. The Foundation for Investing in Communities Limited or any of its 90 per cent subsidiaries as may be approved for the purposes of this Schedule by the Minister for Finance.

PART 2

Approval of a body for education in the arts

1. In this Part—

‘approved body’ means any body or institution in the State which may be approved of by the Minister for Finance and which—

(a) provides in the State any course one of the conditions of entry to which is related to the results of the Leaving Certificate Examination, a matriculation examination of a recognised university in the State or an equivalent examination held outside the State, or

(b)   (i) is established on a permanent basis solely for the advancement wholly or mainly in the State of one or more approved subjects,

(ii) contributes to the advancement of that subject or those subjects on a national or regional basis, and

(iii) is prohibited by its constitution from distributing to its members any of its assets or profits;

‘approved subject’ means—

(a) the practice of architecture,

(b) the practice of art and design,

(c) the practice of music and musical composition,

(d) the practice of theatre arts,

(e) the practice of film arts, or

(f) any other subject approved of for the purpose of this Part by the Minister for Finance.

2. (a) The Minister for Finance may, by notice in writing given to the body or institution, as the case may be, withdraw the approval of any body or institution for the purposes of this Part, and on the giving of the notice the body or institution shall cease to be an approved body from the day after the date of the notice referred to in subparagraph (b).

(b) Where the Minister for Finance withdraws the approval of any body or institution for the purposes of this Part, notice of its withdrawal shall be published as soon as may be in Iris Oifigiúil.

PART 3

Approval of body as eligible charity

1. In this Part—

‘authorisation’ shall be construed in accordance with paragraph 3;

‘eligible charity’ means any body in the State that is the holder of an authorisation that is in force.

2. Subject to paragraph 3, the Revenue Commissioners may, on application to them by a body in the State, and on the furnishing of the body to the Revenue Commissioners of such information as they may reasonably require for the purpose of their functions under this Part, issue to the body a document (in this Part referred to as ‘an authorisation’) stating that the body is an eligible charity for the purposes of this Part.

3. An authorisation shall not be issued to a body unless it shows to the satisfaction of the Revenue Commissioners that—

(a) it is a body of persons or a trust established for charitable purposes only,

(b) the income of the body is applied for charitable purposes only,

(c) before the date of the making of the application concerned under paragraph 2, it has been granted exemption from tax for the purposes of section 207 for a period of not less than 3 years,

(d) it provides such other information to the Revenue Commissioners as they may require for the purposes of their functions under this Part, and

(e) it complies with such conditions, if any, as the Minister for Social, Community and Family Affairs may, from time to time, specify for the purposes of this Part.

4. An eligible charity shall publish such information in such manner as the Minister for Finance may reasonably require, including audited accounts of the charity comprising—

(a) an income and expenditure account or a profit and loss account, as appropriate, for its most recent accounting period, and

(b) a balance sheet as at the last day of that period.

5. Notwithstanding any obligations as to secrecy or other restriction upon disclosure of information imposed by or under any statute or otherwise, the Revenue Commissioners may make available to any person the name and address of an eligible charity.

6. Subject to paragraph 7, an authorisation shall have effect for such period, not exceeding 5 years, as the Revenue Commissioners may determine and specify therein.

7. Where the Revenue Commissioners are satisfied that an eligible charity has ceased to comply with paragraph 3 or 4, they shall, by notice in writing served by registered post on the charity, withdraw the authorisation of the charity and the withdrawal shall apply and have effect from such date, subsequent to the date of the notice, as is specified therein.”.