Non-Profit News Service No. 0445 – Using 'non-profit foundations' to evade or avoid tax
We are currently reviewing arrangements where taxpayers are purporting to stream their untaxed employment, contractor or business income through an unincorporated ‘non-profit private foundation’ they treat as not being subject to income tax.
The foundations, and the people controlling them, frequently don't comply with their other tax obligations, such as those relating to superannuation and goods and services tax.
These types of foundation structures are artificial and contrived, and are being used to evade or avoid tax. We're concerned participants and volunteers using these arrangements are not properly reporting their assessable income by representing that their income hasn't been derived by them, and that it belongs instead to an entity that is not taxable.
A Taxpayer Alert 2016/5 has been issued, outlining the characteristics of these types of arrangements and the concerns we have with them.
If you suspect or are aware of this type of ‘foundation’ arrangement, or would like to make a voluntary disclosure, you can:
Article for not-for-profit organisations advising release of a taxpayer alert that outlines the characteristics of 'non-profit foundations' used to evade or avoid tax.
- phone our confidential hotline on 1800 177 006 (press 1 for the taxpayer alert option)
- email us on firstname.lastname@example.org