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Charities: Commercial activity, competitive neutrality and tax


This article looks at the proposal to impose tax on the commercial activities of charities. The proposal arose following the 2008 High Court decision in FCT v Word Investments Ltd where it was held that an entity that engaged in commercial activities in aid of its religious charitable purpose was a charity (in that case, a charitable institution). The stated rationale for the proposal to tax some commercial activities of charities includes concerns about unfair competition.

This article considers this and other rationales to see whether they can be justified from a policy perspective.

Author profiles

Dr Fiona Martin CTA
Fiona is a solicitor, academic and chartered tax adviser with The Taxation Institute. She commenced working as an academic after several years as a lawyer, both with the government (including the Attorney-General's Department) and in private practice. Her expertise and research are in the taxation law area and in particular how it relates to charities and interacts with issues relating to human rights and traditional land owners. Fiona has published many articles in highly regarded international and Australian law journals, including the Australian Tax Forum and Common Law World Review. She has presented at conferences on issues relating to taxation concessions applying to charities, the application of the GST particularly as it relates to charities and income tax and property development generally. She has also published a number of book chapters and a textbook in the revenue law area. In 2013, she was awarded her doctorate on the application of income tax principles to resource agreements with Indigenous Australians, with particular emphasis on the use of Indigenous charities as a tax-exempt structure. She has also received several research awards. - Current at 01 April 2016
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Ann is a Professor, Law School, Fellow, Monash University, Melbourne.
Current 1 December 2014
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