One of the main characteristics of an Irish non-profit organization
is that it represents a legal entity that is set up for non-commercial purposes
. In Ireland
, investors can set up a wide variety of non-profit organizations
and they have to be registered following the legal procedures applicable to other types of companies
. Our team of specialists in company formation in Ireland
can offer an in-depth presentation on the main requirements set up for this business structure.
Legal aspects regarding Irish non-profit organizations
Although non-profit organizations (NPOs) in Ireland
are registered for non-commercial purposes
, they can conduct a wide range of activities. Businessmen who want to open a company in Ireland
operating as an NPO
can register as one of the following types of entities:
• cooperative – it represents a type of company that is owned by a group of persons and it is set up for the founders’ benefit;
• religious organization – it defines the roles and the procedures of the persons that belong to certain religious groups;
• trade union – a type of entity that is registered for the purpose of protecting the interests of the employees of a specific economic sector;
• residents’ association – it is represented by the residents living in a given area and it is founded with the purpose of protecting and promoting their interests;
• foundation – it is set up with the main purpose of providing funds to other parties, such as institutions, organizations and natural persons, operating in specific fields (education, science, culture, and others).
More information on how to start a non-profit organization in Ireland is presented in the video below:
What are the main legal entities for Irish NPOs?
registered as NPOs in Ireland
must be represented under a legal entity
, it is important to know that most of the organizations
are set under specific business forms. Those who are interested in the procedure of Ireland company formation
should know that most of the NPOs
are set up under one of the following: a trust
, a company limited by guarantee
(most of the Irish NPOs
are set up under this legal entity) or a designated activity company (DAC)
The latter business form, the DAC
, is a newer type of structure that was regulated in Ireland
under the new Companies Act
. This business form was designed for businesses which need to define a specific purpose for their operations in Ireland
. Our team of specialists in company registration in Ireland
can provide in-depth information on the characteristics of this legal entity.
What is the legislation regulating NPOs in Ireland?
Although the NPOs
fall under the regulations of the Companies Act 2014
, they are also regulated by other numerous acts; when opening a company in Ireland
that will operate as a non-profit organization
, investors should also verify the stipulations of the following legal acts, which can be presented by our specialists
the legislation defines what types of activities are considered charities in this country and it also establishes the main institution which has the legal right of regulating this sector, represented by the Charities Regulatory Authority
Friendly Societies Act
it stipulates that the Ministry of Industry and Commerce has the right to regulate certain parts of the non-profit activities developed in Ireland
The Taxes Consolidation Act
it regulates the manner in which various taxes are calculated and imposed to Irish businesses
VAT Consolidation Act
it stipulates that certain NPO activities in Ireland are to be charged with the VAT provided that they offer their services outside their defined scope or the ones that are included in Annex 1 of the Act
What are the main tax exemptions for Irish NPOs?
In terms of taxation
, foreign entrepreneurs who want to start the procedure of Ireland company formation
should know that they can benefit from relevant
tax exemptions. For example, when a local entity obtains the status of a charitable organization
from the Charities Regulatory Authority
, the respective entity is entitled to receive a Charitable Tax Exemption
, which is provided by the Irish Revenue
. As a general rule, tax exemptions refer to the following: the income tax, the corporate tax, the capital gains tax, the stamp duty and the withholding tax of dividends.
How to apply for tax exemptions as an Irish NPO
In order to benefit from a tax exemption in Ireland, it is first required to register with the relevant institutions, which will analyze the status of the respective organization. Further on, it is necessary to complete specific forms, which must be submitted through the Revenue Online Service.
The application must contain information regarding the NPO’s financial accounts
and a statement of the current activities developed through this entity. In the case in which the applicant NPO
is set up as a charity
, it is necessary to provide a copy of its incorporation document
, which in this case, is represented by the charity’s constitution
It is necessary to know that once the institutions have approved the application, the entity is not required to apply each year for a tax exemption. However, this regulation is applicable only in the situation in which the NPO did not change its activities for which the tax exemption was granted.
In order to benefit from the tax exemptions available in this country for charitable institutions, an NPO has to comply with the definition under which the Irish Revenue can provide these tax benefits. According to the Irish Revenue, a charitable organization may obtain tax exemptions as long as it develops activities that are related to the reduction of poverty, the development of education or the promotion of sports activities and other types of activities that are useful for a given community of persons.
Investors must also know that tax exemptions and benefits can also be granted in Ireland
for bodies that promote education in the field or arts
or to those that promote the provisions of the Universal Declaration of Human Rights
; our specialists
can assist with more details on any other matter concerning Irish NPOs
When is an Irish NPO liable for VAT?
As mentioned above, one of the tax exemptions available for an Irish NPO
refers to the VAT
. However, non-profit organizations
can be charged with VAT in a wide range of situations. When an NPO
(operating as a charity
) receives a donation
, the respective sum of money is not charged with the VAT, provided that the donation
does not mean an exchange of services or goods.
In the case in which the donation is received
, but the NPO
provides something in exchange, this relation can be considered taxable, which can also lead to the payment of the VAT. Our team of consultants in company formation in Ireland
can further advise on other situations in which a charitable organization
can be imposed with the VAT.
Businessmen are invited to contact our team of consultants in Ireland company formation
for more details referring to the registration of an Irish NPO
, as well as for further advice on the tax exemptions that are applied to an NPO
, depending on its main scope.