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23 Jun 11
Tax concessions for not-for-profit organisations

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In the 2011 Federal Budget announcement the Government proposed some significant changes to the operation of the not-for-profit (NFP) sector in Australia. There are three broad areas of change which are outlined in more detail in our recent focus article (dated 13 May 2011).

One aspect of the reforms relate to the use of tax concessions by businesses run by NFP entities.

The reforms stand to significantly impact the NFP sector.

Discussion paper

As discussed at our recent seminar/webinar ‘Understanding your organisation from a legal and tax perspective’, the Assistant Treasurer Bill Shorten has released a consultation paper Better Targeting of Not-For-Profit Tax Concessions - seeking public views on how to implement the Budget announcement to better target NFP tax concessions to the altruistic activities of NFPs.

Issues include:

  • whether an NFP will be required to establish a new entity to run unrelated commercial activities
  • what will the legal structure and tax structure of any new entity be
  • what are the problems associated with transition by an existing organisation to any new organisation
  • what is an unrelated commercial activity
  • what organisations will be excluded
  • will an organisation be able to retain income to grow, and
  • what will be the tax rate be.

All NFP organisations are urged to consider the paper and submit comments direct to Treasury. Please refer to www.treasury.gov.au or the link above for further information.

The window for comment is quite brief, with responses to the consultation paper due by close of business Friday 8 July 2011.

Slides/webinar

For those who would like to revisit or share the slides from our recent seminar, click here to download a copy.

Please click here if you prefer to listen to a recording of the webinar.

Next seminar

Details will follow soon of our next seminar in August. We look forward to seeing you there.

Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.

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