Non-Profit News Service No. 0034 - Public benevolent institutions - Taxation ruling released
Taxation Ruling TR 2003/5 Income tax and fringe benefits tax: public benevolent institutions has been issued. The ruling will help non-profit organisations work out whether they are public benevolent institutions (PBIs), and help the more than 10,000 organisations currently accepted as PBIs by the Tax Office when they review to ensure that they continue to be PBIs.
The ruling explains the meaning of the expression ‘public benevolent institution’, and how it is applied to particular organisations using examples. It also explains whether PBIs are charitable institutions (for income tax exemption), and when a PBI is taken to be in Australia (for income tax gift deductibility).
Various tax concessions can apply to PBIs, including a capped exemption from fringe benefits tax, deductible gift recipient status, and access to refunds of imputation credits on franked dividends. The ruling does not explain the concessions themselves.
The ruling draws together and summarises the many decisions of the courts on PBIs. It expands, while being consistent with, the Tax Office’s previous public statements on PBIs, and finalises draft Taxation Ruling TR 2000/D14.
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