Revenue has published eBrief No. 29/11 which clarifies the correct VAT treatment that should apply in respect of donations to charities made via mobile phones using SMS short codes.

In cases where donations are made via mobile phones using a SMS short code specific to a charity, the full amount is paid over to that charity, and the telecommunications provider waives their fee, the entire amount is deemed outside the scope of VAT. However, in cases where the provider of the telecommunications service charges a fee for facilitating the transaction, then they are obliged to charge VAT at the standard rate on this fee. Any monies that are directly transferred to the charity, independent of this fee, are considered to be a charitable donation which is deemed to also be outside the scope of VAT.

Further information on the VAT treatment of charitable donations via SMS is set out in Revenue's eBrief No. 29/11 which is available on here.