Decision impact statement

Commissioner of Taxation v The Hunger Project Australia

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Court Citation(s):
[2014] FCAFC 69
2014 ATC 20-458
(2014) 221 FCR 302
(2014) 314 ALR 333

Venue: Federal Court
Venue Reference No: NSD 1604 of 2013
Judge Name: Edmonds, Pagone and Wigney JJ
Judgment date: 13 June 2014
Appeals on foot: No
Decision Outcome: Unfavourable to the Commissioner

Impacted Advice

Relevant Rulings/Determinations:

Subject References:
Public Benevolent Institution
Fringe Benefits Tax

Exclamation The ATO is reviewing the impact of this decision including precedential documents and Law Administration Practice Statements.

Précis

Outlines the ATO's response to this case which concerns whether an organisation that carries out, principally, fundraising activities can be a public benevolent institution within the meaning of subsection 57A(1) of the Fringe Benefits Tax Assessment Act 1986.

Brief summary of facts

The Applicant is part of a worldwide collaboration of organisations operating under the name 'The Hunger Project', whose principal aim is the relief of hunger. Its activities are, in the main, fundraising in Australia and applying those funds towards projects carried out by affiliated entities overseas. It is involved, but not in a central way, with some aspects of the strategic decision making of the global organisation.

Issues dDecided by the court

The Court agreed with the primary Judge (Perram J) and found that there was no good reason to read into the meaning of the expression 'public benevolent institution' (PBI) a requirement that the institution dispense relief directly.

The Court found that the ordinary contemporary meaning of a PBI is broad enough to encompass an institution which raises funds for provision to associated entities for use in programs for the relief of hunger in the developing world. The fact that it does not itself directly give or provide that relief, but does so via related or associated entities, is no bar to it being a PBI.

ATO view of decision

The ATO will adopt the decision and reasoning of the Court.

The ATO observes that on 3 December 2012, the Australian Charities and Not-for-profits Commission (ACNC) became responsible for the registration of charities that are public benevolent institutions. The ACNC issued on 24 July 2014 a Commissioner's Interpretation Statement providing guidance as to the meaning and application of this decision.

For the purposes of the Fringe Benefits Tax Assessment Act 1986, the ATO will endorse an entity as a PBI if it meets the conditions in section 123C of that Act, including that it has been registered by the ACNC as a charity that is a public benevolent institution.

Implications for impacted advice or guidance

Taxation Ruling TR 2003/5 has been withdrawn with effect from 17 May 2017.

Guidance from the Australian Charities and Not-for-profits Commission on this case, and the meaning of a 'public benevolent institution', is available in Commissioner's Interpretation Statement: Public Benevolent Institutions (CIS 2016/03).

Accordingly, the ATO will not be issuing a replacement public advice product.

Amendment History

Date of amendment Part Comment
17 May 2017 Comments section Deleted
Administrative treatment Updated to reflect the withdrawal of TR 2003/5

Legislative References:
Fringe Benefits Tax Assessment Act 1986
57A
123C

Case References:
Ambulance Service (NSW) v Deputy Commissioner of Taxation
[2002] FCA 1023
2002 ATC 4681
(2002) 50 ATR 496

Ambulance Service (NSW) v Deputy Commissioner of Taxation
(2003) 130 FCR 477
[2003] FCAFC 161
2003 ATC 4674

Australian Council of Social Service Inc v Commissioner of Pay-roll Tax (NSW)
(1982) 13 ATR 290
82 ATC 4385

Australian Council of Social Service Inc v Commissioner of Pay-roll Tax
(1985) 1 NSWLR 567
(1985) 16 ATR 394
85 ATC 4235

Commissioner of Pay-roll Tax (Vic) v Cairnmillar Institute
(1990) 21 ATR 665
90 ATC 4752

Commissioner of Pay-roll Tax (Vic) v Cairnmillar Institute
[1992] 2 VR 706
(1992) 23 ATR 314
92 ATC 4307

Federal Commissioner of Taxation v Word Investments Ltd
(2008) 236 CLR 204
2008 ATC 20-072

Perpetual Trustee Co. Ltd v .Federal Commissioner of Taxation
(1931) 45 CLR 224
[1931] HCA 20

Commissioner of Taxation v The Hunger Project Australia history
  Date: Version:
  8 August 2014 identified
You are here 17 May 2017 Resolved