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13 Mar 14 Draft legislation restating and centralising the special conditions for tax concession entities

On 12 March 2014, Treasury released for public consultation draft legislation, draft regulations and explanatory materials to implement the 2009-10 Budget measure to restate and centralise the special conditions for tax concession entities.

The Government announced that it would proceed with the measure on 14 December 2013 as part of the announced but unenacted measures that would proceed in order to restore simplicity and fairness to the Australian tax system.

This measure amends the tax law to restate and centralise the special conditions for tax concession entities by:

  • restating the 'in Australia' special conditions for income tax exempt entities, ensuring that they generally must be operated principally in Australia and for the broad benefit of the Australian community (with some exceptions);
  • centralising and simplifying in one place the other special conditions entities must meet to be income tax exempt, such as complying with all the substantive requirements in their governing rules; and 
  • codifying the 'in Australia' special conditions for deductible gift recipients ensuring that they must generally operate solely in Australia, and pursue their purposes solely in Australia (with some exceptions, such as overseas aid funds, some environmental organisations, some touring arts organisations and medical research institutes).

Improvements have been made by the exposure draft to address concerns raised by the not-for-profit sector with the former Government's Bill (Tax Laws Amendment (Special Conditions for Not-for-profit Concessions) Bill 2012).

The closing date for submissions is Monday 7 April 2014.

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