Law on Associations

Country Reports: Asia Pacific

The International Journal
of Not-for-Profit Law

Volume 2, Issue 4, June 2000

Australia

1. Taxation

On 22 December 1999 Act No 179 of 1999, A New Tax System (Tax Administration) Act 1999, came into force. This law requires charities and other organisations wishing to receive tax deductible gifts to be endorsed by the ATO. The endorsement requirement supersedes existing ATO approvals, and applies to:

  • gifts made after 30 June 2000;
  • income eligible for tax exemption for periods from 1 July 2000 onwards.

The Commissioner of Taxation has power to issue endorsements after 1 July 2000 with retroactive effect to that date.

To qualify for endorsement, the organisation must obtain an Australian Business Number (ABN). Organisations with ABNs will be listed in the Australian Business Register; the entry for each organisation will indicate whether the organisation is eligible to receive deductible gifts.

When such organisations receive tax deductible gifts, they must issue a receipt stating the name and ABN of the organisation; failure to comply can lead to revocation of ATO endorsement.

In December 1999 the ATO issued 5 Draft Taxation Rulings giving guidance on the following aspects of the new tax system for charities:

  • the criteria for funds established for the relief of people in need to be eligible to be endorsed as deductible gift recipients;
  • the criteria for identifying whether a gift to a public library, museum or art gallery is deductible;
  • the criteria for determining whether charities and funds should be endorsed;
  • the interpretation of the requirement on deductible gift recipients to maintain a gift fund; and
  • the criteria to be satisfied for an institution or fund to be a charity.

Comments on the draft rulings were invited by 3 March 2000.

(Draft Tax Rulings TR 1999/D17, D18, D19, D20 & D21)