ATO Interpretative Decision

ATO ID 2004/767 (Withdrawn)

Goods and services tax

• This ATO ID is withdrawn as the position stated in this ATO ID is no longer current. It contains a superseded definition of a religious institution for the purposes of the tax legislation. The current ATO position on this issue is contained in Taxation Ruling TR 2019/3 Fringe benefits tax: benefits provided to religious practitioners.
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

For the purposes of section 50-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), is the entity, a self-appointed spiritual leader of a large group of people, a religious practitioner and a member of a religious institution?

Decision

Yes, for the purposes of section 50-5 of the GST Act, the entity is a religious practitioner and a member of a religious institution.

Facts

The entity is the self-appointed spiritual leader of a large group of people. The group believes that the entity can assist them in achieving spiritual enlightenment. The philosophy of the group includes the belief in a supernatural being and sets out rules that are designed to govern the conduct of the group.

The entity is authorised to conduct worship and other ceremonies for the group.

The entity writes booklets that set out the beliefs and practices followed by the group with the intention of selling these booklets to prospective group members.

The entity does not sell the booklets as an employee or agent of the group or any other entity.

Reasons for Decision

Section 50-5 of the GST Act provides that activities of a religious practitioner done in pursuit of their vocation as a religious practitioner and as a member of a religious institution will be treated, for the purposes of applying the GST law, as activities done by the religious institution and not by the religious practitioner, unless the religious practitioner is acting as an employee or agent of the religious institution or another entity.

The GST treatment of the activity of selling the booklets is dependent on first determining whether the entity performs the activity as a religious practitioner in pursuit of their vocation and as a member of a religious institution.

While the term 'religious practitioner' is defined in section 195-1 of the GST Act, the term 'religious institution' is not defined in the GST Act. However, for the purposes of the Fringe Benefits Tax Assessment Act 1986 (FBTAA), both terms have been considered in Taxation Ruling TR 92/17.

As the definition of 'religious practitioner' provided in section 195-1 of the GST Act is the same as that provided in subsection 136(1) of the FBTAA, it is appropriate to consider both terms in the context of the interpretations provided in TR 92/17.

For a body to be regarded as a religious institution, paragraph 5 of TR 92/17 provides that the following characteristics must be present:

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its objects and activities must reflect its character as a body instituted for the promotion of some religious object, and

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the beliefs and practices of the members of that body must constitute a religion.

Paragraph 6 of TR 92/17 further provides that the two most important factors for determining whether a particular set of beliefs and practices constitute a religion are:

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belief in a supernatural being, thing or principle, and

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acceptance of canons of conduct, which give effect to that belief, but which do not offend against the ordinary laws.

The group that the entity leads has a belief in a supernatural being and there are a set of rules that are designed to govern the conduct of the group. As such, the belief and practices of the group constitute a religion and as the group's primary and dominant objective is to promote their religion, the group is a religious institution.

The term 'religious practitioner' is defined in both section 195-1 of the GST Act and subsection 136(1) of the FBTAA to include a minister of religion.

Taxation Ruling TR 92/17 further considers the necessary characteristics for a person to be considered a minister of religion. Paragraph 13 of TR 92/17 provides that many, if not all, of the following characteristics should be present:

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the person is a member of a religious institution

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the person is recognised officially by ordination or other admission or commissioning, or, where the particular religion does not require a minister to be formally ordained, the person is authorised to carry out the duties of a minister based on a specified level of theological or other relevant training or experience

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the person is recognised officially as having authority in matters of doctrine or religious practice

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the person's position is distinct from that of the ordinary adherents of the religion

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the person has acknowledged leadership in the spiritual affairs of the religious institution, and

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the person is authorised to discharge the duties of a minister or spiritual leader, including the conduct of religious worship and other religious ceremonies.

The entity's group is a religious institution and as such, the entity is a member of a religious institution. As the leader of the group, the entity's position is distinct from that of the other members of the religion. The group believes that the entity can assist them in achieving spiritual enlightenment. In addition, the entity is authorised to conduct worship and other ceremonies and these ceremonies and worship are religious in nature. There are sufficient characteristics present to consider that the entity is a minister of religion. As a minister of religion falls within the definition of 'religious practitioner', the entity is a religious practitioner.

Accordingly, the entity is a religious practitioner and a member of a religious institution for the purposes of section 50-5 of the GST Act.

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 50-5
   section 195-1

Related Public Rulings (including Determinations)
Taxation Ruling 92/17

Related ATO Interpretative Decisions
ATO ID 2004/765
ATO ID 2004/766

Keywords
Goods and services tax
GST special rules

Siebel/TDMS Reference Number:  4104192

Business Line:  Indirect Tax

Date of publication:  17 September 2004

ISSN: 1445-2782