On 25 February 2010, Tax Laws Amendment (Political Contributions and Gifts) Bill 2008 was again debated by the Senate.
The original Bill (as introduced into Parliament) amended the ITAA 1997 and the ITAA 1936 to remove tax deductibility for contributions and gifts to political parties, independent members and independent candidates. The Bill also amended the GST Act to ensure that the GST treatment of these entities is not affected by the income tax amendments.
On 3 February 2009, the Bill was passed by the Senate with amendments that sought to restore the ability of individuals (but not companies) to claim tax deductions for donations up to $1,500. After consideration on 18 June 2009, the House of Representatives disagreed with the amendments made by the Senate but made further amendments, proposed by the Government, to the Bill.
The Government amendments maintain the effect of the existing law for individuals who make a political gift or contribution, but not those individuals who make the gift or contribution in the course of carrying on a business. Those non-business individuals will continue to be able to claim a deduction for political gifts or contributions up to $1,500.
When the Bill again came before the Senate on 25 February 2010, the Senate did not insist on its amendments, and agreed to House amendments made in their place.
The amendments made by the Bill apply from the beginning of the 2008-09 income year.
The Bill now awaits Royal Assent.