Voluntary Organizations and Civil Society

Revenue Commissioners v Sisters of Charity of the Incarnate Word

The International Journal
of Not-for-Profit Law

Volume 1, Issue 2, December 1998

A recent Irish tax case, Revenue Commissioners v Sisters of Charity of the Incarnate Word, concerned exemption from Irish income tax on a nursing home in Ireland owned and run by an order of nuns with their headquarters in the US. In its judgement delivered on 11 February 1998, the High Court (Mr. Justice Geoghegan) agreed with the principle established in the UK case of Camille and Henry Dreyfus Foundation Inc. v Commissioners of Inland Revenue [1955] (36 Tax Cases 126) that tax exemptions do not apply to foreign charities. Accordingly, the Irish legislation exempting charities from income tax is limited to charities “established” in Ireland.

However, the judge distinguished the Dreyfus case from the instant case, on the grounds that the order of nuns had a place of business in Ireland and that the exemption from Irish taxation was being claimed only in relation to the foreign charity’s activities in Ireland. The charity could therefore be said to be established in Ireland and entitled to exemption from income tax.