Miscellaneous 2011

An update on tax reforms to the NFP sector

Source: Taxation In Australia Journal Article

Published Date: 1 Nov 2011


The majority of not-for-profit (NFP) entities in Australia access federal tax concessions (income tax exemption, deductible gift recipient status, fringe benefits tax, and goods and services tax concessions). The Commonwealth government is committed to reform of the regulation of the NFP sector and, to that end, has announced a range of significant legislative measures. In this article, the author examines four important proposed reforms which will potentially impact on the vast majority of NFPs that currently access tax concessions. These are a proposal to tax NFPs on income derived from their “commercial activities”, the proposed new statutory authority (the Australian Charities and Not-for-profits Commission), a new legislative definition of “charity”, and amendments in response to the High Court decision in the Word Investments case.

The article highlights what proactive steps NFP entities should take to mitigate potential risks to their continuing entitlement to federal tax concessions as a result of the announced measures.

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Miscellaneous 2011

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