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The ATO has published a Decision Impact Statement in relation to the decision of the Full Court of the Federal Court in FCT v Hunger Project Australia [2014] FCAFC 69; 2014 ATC 20-458.

The case concerned whether an organisation that carries out, principally, fundraising activities can be a public benevolent institution within the meaning of s 57A(1) of the Fringe Benefits Tax Assessment Act 1986.

The Full Court agreed with the primary Judge and found that there was no good reason to read into the meaning of the expression 'public benevolent institution' (PBI) a requirement that the institution dispense relief directly. The Court found that the ordinary contemporary meaning of a PBI is broad enough to encompass an institution which raises funds for provision to associated entities for use in programs for the relief of hunger in the developing world. The fact that it does not itself directly give or provide that relief, but does so via related or associated entities, is no bar to it being a PBI.

The ATO says that it will adopt the decision and reasoning of the Court. It also states:

"The ATO observes that on 3 December 2012, the Australian Charities and Not-for-profits Commission (ACNC) became responsible for the registration of charities that are public benevolent institutions. The ACNC issued on 24 July 2014 a Commissioner's Interpretation Statement providing guidance as to the meaning and application of this decision.

For the purposes of the Fringe Benefits Tax Assessment Act 1986, the ATO will endorse an entity as a PBI if it meets the conditions in section 123C of that Act, including that it has been registered by the ACNC as a charity that is a public benevolent institution."

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