AUSTRALIA
I CHINA I JAPAN I KOREA
NEW ZEALAND I PHILIPPINES
I TAIWAN I VIETNAM
In a
bid to encourage corporate and personal philanthropy, the Prime Minister,
Treasurer and Minister for Family and Community Services announced a package of tax measures. The
measures:
grant tax deductions for non-testamentary
donations of property worth more than AUD 5,000, regardless of when the
property was acquired. This measure does not affect the existing threshold for
deduction of property donations under the Cultural Bequest programme, which may
be less than AUD 5,000;
exempt outright testamentary gifts of
property to certain eligible organizations from capital gains taxation;
create a new category of
"private funds" to be included in the list of organizations to whom
gifts are tax-deductible; and
provide greater incentive for
donations of property made under the Cultural Bequest programme by spreading
income tax relief, at the taxpayer's option, over a period of up to 5 years.
To
be eligible for approval, private charitable funds will have to meet all the
criteria required to qualify as a public fund, but will not need to raise funds
from the public.
It
is anticipated that this tax package will specifically encourage donations of
valuable works of art to the national and state galleries. These measures were
introduced into Parliament on 30 June 1999; if the bill is passed it will have
effect for gifts on or after 1 July 1999.
(Joint
press release dated 26 March 1999; Taxation Laws Amendment Bill (No. 8) 1999 )
On
8 July 1999 a series of government bills were enacted to introduce a Goods and
Services Tax (GST), a form of value added tax, with effect from 1 July 2000.
Subject to any amendments arising in the course of the passage of the bills
through parliament, the GST implications for non-profit organizations are
broadly as follows:
supplies of education, medical and
health services, child care, and religious services will be GST-free
(zero-rated);
non-commercial activities of
charitable organizations will be GST-free if the consideration for the
supply is less than 50% of the GST-inclusive market value of the supply;
the commercial activities of
charities, including membership fees but excluding donations, will be liable to
GST at the standard rate (currently 10%);
sales by a charity of donated second-hand
goods will be GST-free;
GST paid by charities on their
purchases will be recoverable.
Non-profit
organizations, whether or not charitable, will not be required to register for
GST until their sales, including membership fees but excluding donations,
exceed AUD 100,000 a year. Voluntary registration by organizations with annual
sales below the limit is allowed.
(A new tax system (Goods and Services) Act 1999)
A. Legal
Framework
On
22 July 1999 the Ministry of Civil Affairs issued a decision to the effect that
the Research Society of Falun Dafa and the Falun Gong organisations under its
control had not been registered as required by the "Regulations on the
registration and management of mass organisations" and were therefore
banned as illegal organisations with immediate effect. On the same day the
Ministry of Public Security issued a notice prohibiting all activities
publicising or in support of Falun Gong.
B.
Taxation
The
Ministry of Finance is in the course of drafting a new law on inheritance tax.
It is expected to impose tax at progressive rates on estates exceeding RMB
100,000 (about USD 12,000), and to include an exemption for gifts to science,
educational, and other social programs.
(Asia Pulse, 20 October 1999)
A. Legal
framework
The Japanese Ministry of Foreign Affairs has launched a study by the
International Development Center of Japan, which is entitled: “Comparative
studies of NGO support systems in Western countries and Japan.”
The aim of the study is to assist the Ministry in determining the
appropriate roles and functions of NGOs in providing overseas development
assistance (ODA). One crucial
aspect of the study will be to look at the enabling legislation for NGOs in the
various countries, including the general legal framework, the existence of
mechanisms for support of NGOs, such as fiscal incentives, and the legislative
environment for NGO-government cooperation with respect to ODA (grant, contract,
and other procurement mechanisms). ICNL
has been invited to assist with this project and will provide information as
needed. For further information about the project, please contact Naoko Horii,
Social Development Specialist (hori02@giganet.net)
or Kimiko Abe, ODA Policy, Political Scientist (abe01@giganet.net).
The
Corporation Tax Law, which was extensively amended effective 1 January 1999, includes
the following change effective for fiscal years beginning on or after 1 January
1999. Donations to certain institutions (such as social welfare, cultural,
educational, religious and charitable institutions) are limited to 5% of income
for the fiscal year after deducting fully deductible donations and loss
carry-forwards.
(Asia-Pacific Tax Bulletin, Vol. 5, No.4 1999)
The
Community Trusts Act 1999, which came into force on 21 May 1999, provides for
the continued operation of community rusts established under the Trustee Banks
Restructuring Act 1988 to acquire the shares in the capital of the successor
companies to the former trustee banks. The assets vested in a community trust
must be applied for charitable, cultural, philanthropic, recreational and other
purposes that are beneficial to the community principally in the area or region
of the trust. The purposes of the trusts are deemed to be charitable for all
purposes other than tax purposes.
The
Incorporated Societies Act 1908 provides that charitable societies must prepare
accounts but does not impose any audit requirement. In January 1999 the Institute
of Chartered Accountants in New Zealand published guidance on best practice in
financial reporting by voluntary organisations.
(Financial reporting by voluntary sector entities, Research Bulletin R-120, reported in Chartered Accountants Journal September 1999)
A
bill introduced in the Senate proposes to amend the tax code to reverse the
Supreme Court decision in the YMCA case (see Case Notes, in this issue of IJNL) that
rental income from real properties owned by nonprofit organisations is not
exempt from income tax.
The
bill also proposes to exempt donations to NPOs from donor's tax with the prior
approval of the Department of Finance and to exempt imported capital equipment
and supplies donated to NPOs from import duties when authorised by the Finance
Secretary and the Customs Commissioner.
(Senate
Bill 1563 reported in Businessworld (Philippines) 10 May 1999)
A. Legal
Framework
On Thursday January 6, 2000, the Himalaya Foundation held a seminar in
Taipei to launch its translation in to Chinese of the 1997 Discussion Draft of
the World Bank Handbook on Good Practices
for Laws Relating to Nongovernmental Organizations.
The seminar was intended to be the kick-off of a process that will lead
to a study of the current legislation affecting NGOs in Taiwan.
It was attended by representatives of NGOs and the government, as well as
members of the Legislative Yuan. The
Handbook was well-received and will provide an excellent stimulus for an online
discussion of the principles underlying a good enabling environment in which
NGOs can grow and thrive.
The seminar was chaired by Mr. S. Gong, the Executive Director of the
Foundation, and Prof. Hsin-Huang Michael Hsiao, Professor of Sociology at
National Taiwan University. Prof.
Hsaio and Prof. Joyce Yen Feng, Professor of Sociology at National Taiwan
University, shared the podium with Dr. Leon Irish and Professor Karla Simon of
the International Center for Not-for-Profit Law, which had developed the
Handbook under the direction of the World Bank.
A lively discussion was held, including statements from many of the
participants, as well as questions from the floor.
The discussion pointed to the many deficiencies in the current legal
framework for NGOs in Taiwan.
The Himalaya Foundation intends to launch an online discussion of the
Handbook on its web site, which will occur over the course of the next 6 to 8
months. A further face-to-face
discussion will be scheduled at some future time.
Input into the discussion is being invited by all who are interested.
It is expected that the series will conclude with concrete
recommendations for legislative reforms.
The Handbook was translated by Randy G. C. Tsai, an associate in the
Taipei law firm of Tsar and Tsai. It
was edited by Profs. Feng and Hsaio. The
World Bank and ICNL are extremely grateful to the Himalaya Foundation for
funding and overseeing the translation of the Handbook.
For further information about the seminar and the ongoing discussion,
please contact Andy Kao, Assistant Executive Director of the Foundation at hmfdtion@ms24.hinet.net.
The Handbook is available on the
Himalya Foundation web site at www.tpic.org.tw
and will shortly be available on the ICNL site as well.
The Himalaya Foundation also intends to publish a Chinese language glossary of frequently used terminology affecting NGOs and civil society. Please contact Andy Kao for further information about the publication date.
In
October 1999 the Ministry of Finance decided to impose VAT on goods used for ODA-funded
projects in order to provide a level playing field between domestically funded
and ODA-funded projects. Japan has claimed that this decision is in breach of an
exemption provided in an agreement between the two countries, and has delayed
the planned signature of new aid initiatives in protest. The Ministry of Finance
has indicated that ODA-funded projects and those financed by non-refundable aid
will be compensated from the state budget, i.e. VAT will be charged but a
corresponding rebate can be claimed from the government.
(Vietnam Investment Review, 18 & 25 October and 1 November 1999)