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Edited version of your written advice
Authorisation Number: 1012862114465
Date of advice: 19 August 2015
Ruling
Subject: Deductible Gift Recipient
Question 1
Does the entity satisfy the special condition in paragraph (a) of item 1 of the table in section 30-15 of the Income tax Assessment Act 1997(ITAA 1997) under the proposed new structure?
Answer
Yes, it is considered that the entity meets the special condition in paragraph (a) of item 1 of the table in section 30-15 of the ITAA 1997 under the proposed new structure.
This ruling applies for the following period:
01 January 2015 - 31 December 2015
The scheme commences on:
01 January 2015
Relevant facts and circumstances
• The entity is an incorporated association and has its registered office in an Australian state.
• All the board members live and work within Australia.
• The Australian Charities and Non Profit Commission (ACNC) have accepted that the entity is a Public Benevolent Institution (PBI).
• The entity is an endorsed as a deductible gift recipient (DGR).
• All donors to the charity are Australian residents.
• Almost all revenue received by the entity is sent overseas to a well-known and local government registered aid organisation. This is currently facilitated by an endorsed developing country relief fund.
• All activities are carefully monitored.
• Under the current structure the entity sends its funds overseas via a registered oversea aid fund.
• If the entity adopts the new structure it will send funds directly to its overseas projects.
Relevant legislative provisions
Section 30-15 - Income tax Assessment Act 1997(ITAA 1997)
Reasons for decision
Question 1
Does the entity satisfy the special condition in paragraph (a) of item 1 of the table in section 30-15 of the Income tax Assessment Act 1997(ITAA 1997) under the proposed new structure?
Detailed reasoning
The special condition in paragraph (a) of item 1 of the table in section 30-15 of the ITAA 1997 requires that 'the fund, authority or institution must be in Australia'.
It is accepted that the entity is an 'institution'. It is an incorporated entity with a board made up of 6 individuals, it is an endorsed Public Benevolent institution registered with the Australian Charities and Non Profit Commission.
The ATO view of where a fund, authority or institution is 'in Australia' is set out in its GiftPack publication. This is located on the ATO website at www.ato.gov.au where it states:
The 'in Australia' condition applies to all DGRs. This means the organisation must be in Australia. If it is not in Australia, it cannot be a DGR.
For funds, institutions and authorities to be in Australia, they must be established and operated in Australia.
The entity was incorporated in an Australian state and has all its board and members in Australia. 100% of its management is carried on in Australia. All donations are made by Australian donors. Almost all of the revenue received is sent overseas to well-known and government registered aid organisations.
As a result, it is accepted that the entity meets the special condition in paragraph (a) of item 1 of the table in section 30-15 of the ITAA 1997 under the proposed new structure.