14 October 2007

GST Relief for Charities

The Minister for Revenue and Assistant Treasurer, Peter Dutton, today announced a package of GST measures to assist charities and other not-for-profit organisations.

“The Government recognises the generous contribution that charities and not-for-profit organisations make to society,” Mr Dutton said. 

“Following representations on a range of GST issues, the Government has decided to make a number of changes to the GST law."

"The changes are in keeping with the Government's ongoing commitment to support greater philanthropy in the community at all levels and will reduce compliance costs for charities and not-for-profit organisations.  This will allow them to spend more of their valuable knowledge, time and experience on activities that benefit the community,” Mr Dutton said. 

The Government will amend the GST law to provide greater certainty to charities by ensuring that:

  • they can use full absorption costing and pooling of similar supplies to determine whether a supply is GST‑free;
  • they can project costs to determine whether a supply is GST‑free; and
  • supplies for no consideration are GST‑free supplies.

As many not-for-profit organisations have numerous small branches, allowance is made in the GST legislation for the parent body to treat its branch as a separate entity. Building on this separate GST treatment of non‑profit sub-entities, the Government will amend the legislation so that the associate provisions do not apply to supplies made between the non‑profit body and its sub-entities, and will ensure that sub-entities can access the same GST concessions that are available to their parent bodies.

These changes are subject to the unanimous agreement of the States and Territories.