Does charity begin and end at home for tax exemptions?

McGregor-Lowndes, Myles (1997) Does charity begin and end at home for tax exemptions? QUT, Brisbane. [Working Paper]


Charitable organisations have remained exempt from income tax in Australia since the first comprehensive state income tax legislation in 18841 through to the current Income Tax Assessment Act 1977. The charitable exemption was also part of the English income tax legislation from its inception in 1799. The Federal Treasurer has released exposure draft legislation which seeks to remove taxation exemptions from some tax exempt organisations that perform any of their activities outside Australia or make trust distributions overseas. The proposed legislation is in response to alleged tax avoidance arrangements which involve tax exempt organisations and charitable trusts.

The paper begins by describing the current charity tax exemption provisions under the Income Tax Assessment Act (ITAA). It then turns to tracing the background policy history of the amendments which appear to be at odds with the form and intent of the proposed provisions. The proposed amendments and their practical consequences are then closely scrutinised and found wanting in a number of respects. Alternative strategies are suggested to arrive at an equitable solution to the avoidance mischief.

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ID Code: 52976
Item Type: Working Paper
Refereed: No
Keywords: Taxation, Australia, Charity
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100) > Taxation Accounting (150107)
Divisions: Current > Research Centres > Australian Centre for Philanthropy and Nonprofit Studies
Copyright Owner: Copyright 1997 Please consult the author.
Deposited On: 08 Aug 2012 00:55
Last Modified: 25 Sep 2013 12:42

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