FINANCE NEWS: MEPs add weight to calls for change in charities' VAT rules

The European Parliament has called on the European Commission to introduce a VAT rebate for charities across the European Union (EU).

It has voted to accept a report from Italian MEP Benedetto della Vedova which calls on the Commission to introduce in the VAT rules either an "exemption with a refund scheme, a mandatory reimbursement of VAT or a super-reduced rate for charities".

The existing EU Transitional VAT regime means that charities cannot recover VAT on spending incurred in pursuing their charitable objectives.The policy has been cited by the Government as the reason why it cannot offer rebates.

The European Charities' Committee on VAT said: "This report will send a powerful message to the other EU institutions which, if acted upon, will greatly help EU charities, which currently lose millions of pounds each year in VAT that cannot be recovered."

- Editorial, p13.

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