Religious congregation liable to €11,000 tax bill after failed appeal

Gordon Deegan

A religious congregation has lost out in a €11,218 tax battle with Revenue concerning the importation of religious statues and ironworks.

This follows the Tax Appeals Commission (TAC) finding that the unnamed congregation, which has charitable status, is liable for the €11,218 tax bill, made up of VAT of €10.433.35 and Customs Duty of €784.60 on the religious statues imported from China in July 2020.

The charity placed the statues costing $58,380 in a monastery in Ireland where the public can make donations. The donations are used for a number of purposes, including both upkeep of the monastery and the relief of needy persons.

The congregation received the statues from a businessman who invoiced the charity for $58,350.

In September 2020, a trustee for the congregation sought an exemption from import duty and VAT from Revenue for the goods “for charitable and humanitarian organisations”.

The congregation told Revenue that the goods “are for fund-raising at occasional charity events for the benefit of people and the donations, if there are any, will be allocated to the Monastery to maintain the statues”.

However, in response, Revenue told the congregation that “relief from customs import duties and VAT is not applicable” in this case.

The congregation paid the Customs and VAT for the religious statues on their arrival by ship into Ireland in order to obtain the statues in September 2020.

Appeal lodged

The congregation appealed the Revenue ruling to the Tax Appeals Commission (TAC) and at hearing claimed that other religious congregations had been treated more leniently by Revenue in respect of the importation of similar goods.

The charity told the TAC that other religious congregations here had been permitted to import similar items without paying import duty or VAT.

The representative stated that he believed the goods had been imported for humanitarian purposes and in accordance with the charitable status of the appellant and that accordingly they should be afforded relief.

In its ruling, the TAC stated that the appellant did not provide any evidence of such allegedly more favourable treatment, and the TAC stated that it accepted Revenue’s evidence that it did not unfairly discriminate against the appellant in its application of the relevant laws.

In upholding the Revenue tax bill, the TAC stated that it was not satisfied that the appellant has demonstrated that the goods were sent free of charge without any commercial intent on the part of the sender.

The congregation had claimed that the goods had been paid for by the businessman as a donation but did not have details of this businessman, and there was no evidence of his identity before the Commissioner, save for one letter.

The TAC also found that the appellant’s case also did not meet the case for tax exemptions as it is clear that the goods were sent with commercial intent on the part of the sender, as it issued an invoice for them and did not send them to the charity at no cost.

The congregation told the TAC that the goods were placed in the monastery, where people could come and place money in a nearby donation box if they wished.

However, the Commission found that it did not appear that the goods would be used for the purpose of fund-raising, but rather that any such fund-raising would be incidental to their presence in the monastery.

The Commission stated that it appreciated that the outcome will be disappointing for the appellant but it is satisfied that Revenue correctly applied the relevant law and did not have discretion to grant the relief sought.