Revenue Note for Guidance

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Revenue Note for Guidance

847AA Deduction for donations to national governing bodies

Summary

This section provides for a scheme of tax relief for donations to certain National Governing Bodies (NGB) where the donations are used to fund projects that support the purchase of certain equipment for the relevant sport of the NGB, to promote participation in sport by women and people with disabilities and to support elite athletes in competitive sports.

Individuals (both chargeable persons who pay income tax under self-assessment, and nonchargeable persons who pay income tax via the PAYE system) can opt either to take a deduction for a relevant donation (which must be at least €250 in a year of assessment) against their total income, or to surrender the relief associated with the donation to the NGB. Where the relief is surrendered by the donor to the NGB, such relief will be claimable by the NGB on or after 1 December in the year after the relevant year of assessment in which the donation is made.

Relief under this new section is also available to a company that makes a relevant donation to a NGB. In this case, relief is provided by way of a deduction against total income.

Details

(1) The definitions used in the section are as follows:

“Disability” as defined under section (2) of the Disability Act 2005.

“Elite Athlete” is a person who is in receipt of financial support provided by Sport Ireland known as Sport Ireland International Carding Scheme or competes at a senior level and participates in a high performance training programme of an NGB and in respect of that programme the person receives financial support known as the Sport Ireland High Performance Programme Funding.

“Minister” means the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media.

“National Governing Body (NGB)” means Olympic Federation of Ireland or Paralympic Ireland or national governing body for sport body which—

  • is listed as a “Type B” or “Type C” organisation on the register maintained and published by Sport Ireland and known as the Register of Organisations in Compliance with the Governance Code for Sport,
  • is approved by the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media.
  • has a valid tax clearance certificate
  • is an approved body of persons within the meaning of section 235(1)

“project” is defined as including projects involving—

  1. purchasing sports equipment approved by the Minister as eligible for funding under the Community Sports Facilities Fund and that is used by the NGB in its respective sport
  2. measures to support elite athletes in achieving excellence in “competitive sport” as defined in section 235 TCA
  3. measures that promote participation in sport by women, and
  4. measures that promote the participation in sport by people with a disability

“qualifying project” means a project that has been given a certificate of approval from the Minister.

“relevant accounting period” is the accounting period in which a relevant donation is made by a company.

“relevant certificate” is a certificate in the form prescribed by the Revenue Commissioners and which contains details including a statement confirming that the donation meets the requirements of the section, that the donor has paid or will pay the proper amount of income tax referable to the donation and the donors PPS number.

“relevant donation” means a donation of at least €250, which is proportionately reduced in the case of a company which has an accounting period of less than 12 months in length.

“relevant year of assessment” is the year of assessment in which a relevant donation is made by an individual.

“sports equipment” means equipment approved by the Minister as eligible for funding under the Community Sport Facilities Fund.

(2) A donation will satisfy the requirements of this subsection if:

  1. it is made to NGB for the sole purpose of funding a qualifying project,
  2. it is or will be used by the NGB for that project,
  3. it is not otherwise deductible in computing the profits or gains of a trade or profession or deductible as an expense of management in computing the profits of a company,
  4. that the donation is not one to which section 847A or section 848A applies,
  5. is not subject to a condition as to repayment,
  6. the donor nor a person connected with the donor received any benefit as a result of making the donation,
  7. the donation is not conditional on or related to the acquisition of property by the NGB (otherwise than by way of gift) from the donor or any person connected with the donor,
  8. in the case if a donation made by an individual, the PAYE or self-assessed individual-:
    1. is Irish tax resident for the year in which the donation is made.
    2. opts to claim tax relief for a donation themselves a relevant certificate is not required. Both self-assessed and PAYE taxpayers will, however, be required to submit an appropriate certificate if they elect to direct the relief to the sports body.
    3. who elect to give the tax relief to the sports body must have paid the tax mentioned in the appropriate certificate and are not entitled to a repayment of that tax.

(3) Where Revenue is satisfied that an individual has made a relevant donation subsection (4), (5) or (6) apply.

(4) This subsection sets out the rules that apply for PAYE only individuals who make a relevant donation.

  1. (4)(a)A PAYE-only taxpayer has the option:-
    1. claim the relief themselves where the amount of the donation is deducted from the total income or
    2. surrender the relief to the NGB (relevant donation grossed up)
  2. (4)(b) the grossed-up amount of a donation is the amount, which after deducting the income tax at the standard rate or the higher rate or partly standard and partly at the higher rate leaves the amount of the donation.
  3. (4)(c) PAYE- only taxpayer claims the relief themselves the amount of the donation will not reduce their income or their spouse’s or civil partners income for the purpose of quantifying relief for pension purposes.
  4. (4)(d) the Revenue Commissioners have the authority to make Regulations relating to how a PAYE-only taxpayer may exercise the above.
  5. (4)(e) PAYE-only taxpayer who opts to claim tax relief on the donation themselves is obliged to submit a claim online, providing details of the donation and any other information required by the Revenue Commissioners.
  6. (4)(f) the tax relief relating to the donations will not be paid to the NGB until 1 December in the year following the year in which the donation is made.

(5) This subsection sets out the rules that apply for chargeable persons who make a relevant donation.

  1. (5)(a) the self-assessed person can opt:-
    1. to take a deduction for the relevant donation amount.
    2. to surrender the relief to the national governing body.
  2. (5)(b) the grossed up amount of a donation is the amount, which after deducting income tax at the standard rate or the higher rate, or partly at both rates, leaves the amount of the donation.
  3. (5)(c) where a self-assessed taxpayer opts to claim the tax relief themselves, the amount of the donation is not to be taken into account in reducing the income of the individual or their spouses or civil partners income for the purpose of quantifying the relief for pension contributions.
  4. (5)(d) the Revenue Commissioners can make Regulations relating to how a self assessed taxpayer may exercise the above options.
  5. (5)(e) the taxpayer who opts to claim the relief themselves must submit the claim themselves on their return of income Form 11.
  6. (5)(f) repayment to an NGB will not be made until after 1 December in the year after the year the donation was made.

(6) For corporation tax purposes a company who makes a relevant donation. The relevant donation amount is treated as a deductible trading expense of a trade carried on by the company, or an expense of management deductible from the total profits of the company, for the accounting period in which it is made.

(7) A company that is claiming the relief for a donation to file a return (CT1) for the purposes of making a claim.

(8) For a project to be considered an approved project, the NGB concerned must apply to the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media for a certificate of approval. The Minister can also revoke the certificate given under this subsection. The Minister shall not issue a certificate if the project costs (or estimated to be) in excess of €40 million

(9) An NGB is required (except in circumstances where the cost of the approved project exceeds €40 million) to issue receipts to persons making relevant donations which must contain specified details including a statement that the body is a national governing body and that the donation will be spent on a qualifying project. The receipt must also show the name and address of the donor and the amount of the donation.

(10) If the relevant donation was not used for a qualifying project or if the relief was not due, then the exemptions provided for in section 235(2) and 235A(2) will not apply to the relevant donation.

(11) The Revenue Commissioners may nominate any of their officers to monitor and discharge where necessary any of the functions of this section.

(12) The NGB is obliged to submit a return of all relevant donations to the Minister when requested to do so.

(13) The Revenue Commissioners may consult with the Minister in relation to questions relating to qualifying projects or relevant donations.

(14) Relief under this section will not be given where the total amount of all relevant donations to the NGB for a qualifying project exceeds €40 million.

Relevant Date: Finance Act 2024