17 April 2012

Consultation on Restating and Standardising the Special Conditions for Tax Concession Entities

The Assistant Treasurer, David Bradbury, has today released a revised exposure draft for restating and standardising the special conditions for tax concession entities.

The Government announced in the 2009-10 Budget that it would amend the 'in Australia' special conditions in Division 50 of the Income Tax Assessment Act 1997 to ensure that Government retains the ability to maintain appropriate oversight over those organisations seeking to pass money to overseas charities and other entities.

The exposure draft also amends the 'in Australia' special conditions as they apply to deductible gift recipients, and standardises the term 'not-for-profit' throughout the tax laws.

An initial round of public consultation on draft legislation was held between 4 July and 12 August 2011. Following considerations of the submissions received, changes have been made to the exposure draft and explanatory materials.

"Effective engagement and close consultation with the not-for-profit sector is of vital importance to the Gillard Government," said Mr Bradbury.

"The Government has listened to the sector about the issues raised during the consultation process, and has revised the draft to ensure it delivers an effective outcome.

"I would like to thank all those stakeholders who have participated in this consultation process and I look forward to continuing to work closely with the sector into the future."

Restating the 'in Australia' special conditions provide that income tax exempt entities must operate and pursue objectives principally in Australia and for the broad benefit of the Australian community unless they are deductible gift recipients, which are subject to separate requirements, or are prescribed in the regulations as exempt.

The 'in Australia' special conditions provide additional measures to address possible abuse of not‑for‑profit entities for the purposes of money laundering and terrorist financing, and ensure the proper operation of not-for-profit entities, their use of public donations and funds, and the protection of their assets.

Consultation on the revised exposure draft is open until Friday 11 May 2012. Copies of the exposure draft and explanatory material can be found on the Treasury website.