HC Deb 26 March 1979 vol 965 cc54-5W
Mr. Gow

asked the Chancellor of the Exchequer whether he will publish in the Official Report a summary of the principal differences in the tax reliefs available for charities in each of the nine member States of the EEC.

Mr. Denzil Davies,

pursuant to his reply [Official Report, 16 March 1979; Vol. 964, c. 370] gave the following reply:

The definition of charity varies in the countries concerned. Subject to that, for taxes on income, the position in most other EEC countries, as in the United Kingdom, is that broadly speaking a registered charity is exempt from tax on its income provided that the income is used for charitable purposes. In Belgium, however, charities are liable to some tax, but only on their investment income and on capital gains. In Italy, charities are liable to tax on all their income, but it is charged at a lower rate—usually half the company rate of tax.

So far as taxes on the transfer of capital are concerned, all EEC countries give favourable treatment to transfers of capital to charities. In the United Kingdom, transfers to charities are exempt—subject to a £100,000 limit on transfers on death or within one year of death. France, Germany, Ireland and Italy give similar treatment, provided that the gift is used for charitable purposes. Belgium, Denmark, Luxembourg and the Netherlands charge tax on transfers to charities, but at preferential rates. In addition, there is in the Netherlands a higher threshold for the imposition of tax on transfers to charities than for other transfers.

As regards VAT, the position in the United Kingdom is similar in practice to that of most EEC member States. The general rule is that there is no relief for charitable organisations as such, but many supplies by charities which are made for no or for less than an economic consideration are relieved from VAT—usually as part of wider categories of relief. In most member States such relief takes the form of exemption. In the United Kingdom most of the activities of charities are outside the scope of the tax. In addition, certain specific reliefs are given by zero-rating.