Tax Laws Amendment (Political Contributions and Gifts) Act 2010

(16 of 2010)

An Act to amend the law relating to taxation, and for related purposes

[Assented to 15 March 2010]

The Parliament of Australia enacts:

1   Short title

This Act may be cited as theTax Laws Amendment (Political Contributions and Gifts) Act 2010.

2   Commencement

This Act commences on the day on which it receives the Royal Assent.

3   Schedule(s)

Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1   Political contributions and gifts

Income Tax Assessment Act 1997

8   Section 12-5 (table item headed "political parties")

Repeal the item, substitute:

9   After section 26-20

Insert:

26-22 Political contributions and gifts

You cannot deduct political contributions or gifts

(1) You cannot deduct under this Act (other than Subdivision 30-DA):

(a) a contribution (including a membership fee) or gift to a political party that is registered under Part XI of theCommonwealth Electoral Act 1918 or under corresponding State or Territory legislation; or

(b) a contribution or gift to an individual when the individual is a candidate in an election for members of:

(i) an*Australian legislature; or

(ii) a*local governing body; or

(c) a contribution or gift to an individual who is a member of:

(i) an Australian legislature; or

(ii) a local governing body.

Exception for employees and office holders

(2) However, subsection (1) does not apply to a loss or outgoing incurred in gaining or producing assessable income from which an amount is required to be withheld under section 12-35 or 12-45 in Schedule 1 to theTaxation Administration Act 1953.

Note: These provisions of theTaxation Administration Act 1953 require amounts to be withheld from income of employees and office holders.

Starting and stopping being a candidate

(3) For the purposes of this section, an individual:

(a) starts being a candidate when the individual's intention to be or to attempt to be a candidate for the election is publicly available; and

(b) stops being a candidate at the earlier of:

(i) the time when the result of the election is declared or otherwise publicly announced by an entity (an electoral official ) authorised under the relevant electoral legislation; and

(ii) the time (if any) when the individual's intention to no longer be a candidate for the election is publicly available.

Starting being a member

(4) An individual who becomes a member as a result of an election (including an election that is later declared void) is taken to start being a member when the individual's election as a member is declared or otherwise publicly announced by an electoral official.

10   After subsection 30-242(3)

Insert:

(3A) You can deduct the contribution or gift only if:

(a) you are an individual; and

(b) you donot make the gift or contribution in the course of*carrying on a*business.

17   At the end of section 110-38

Add:

(6) Expenditure doesnot form part of any element of the cost base to the extent that section 26-22 prevents it being deducted.

Note: Section 26-22 denies deductions for political contributions and gifts.

18   After subsection 110-55(9E)

Insert:

(9F) Expenditure doesnot form part of the reduced cost base to the extent that section 26-22 prevents it being deducted.

Note: Section 26-22 denies deductions for political contributions and gifts.

21   Application

The amendments made by this Schedule apply in relation to contributions or gifts made on or after 1 July 2008.