In the 2011-12 federal Budget, the government announced it would reform tax concessions provided to not-for-profit organisations. The reforms aim to ensure concessions are targeted only at activities directly furthering an organisation's purpose. That is, the purpose that is the basis for an organisation's exemption from income tax.
A proposed start date of 1 July 2014 is to apply to activities that commenced after 7.30 pm (AEST) on 10 May 2011. These activities will become subject to the measure from 1 July 2014 and the measure will not affect tax concessions that were used for these activities before 1 July 2014.
This extension will enable further consultation and engagement with the not-for-profit sector on this measure, ensuring stakeholders have an opportunity to provide detailed input.
As part of transitional arrangements, relevant activities that commenced before 7.30 pm (AEST) on 10 May 2011 will not become subject to the measure until 1 July 2015. The measure will not affect tax concessions used for these activities before 1 July 2015.
For more information refer to:
- joint media release No. 003/2013 issued on 31 January 2013 by the Assistant Treasurer and the Minister for Social Inclusion
- joint media release No. 009/2012 issued on 30 March 2012 by the Assistant Treasurer and Minister assisting Deregulation and the Minister for Social Inclusion Minister for Mental Health and Ageing Minister Assisting the Prime Minister on Mental Health Reform
- joint media release No. 077/2010 issued on 10 May 2011 by the Assistant Treasurer and Minister for Financial Services and Superannuation and the Minister for Human Services and Social Inclusion 'Making it easier for charities to help those who need it'.
The government announced on 31 January 2013 that the better targeting of not-for-profit tax concessions measure will now commence from 1 July 2014 for new activities starting after 7.30 pm 10 May 2011, and from 1 July 2015 for activities that started before 7.30 pm 10 May 2011.
The extension of the start dates of the measure means that not-for-profit organisations should follow the existing law up until their applicable start date for the measure.
Any not-for-profit organisations that have anticipated the proposed law change applying from the (previously announced) earlier start dates may need to seek an amendment to any income tax return, fringe benefits tax return or activity statement that applied the proposed law change. If a reduction in liability results, interest on overpayment will be paid where applicable.
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For more information about the related measures, refer to the following consultation papers:
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Last Modified: Friday, 10 May 2013