The Assistant Treasurer, the Hon Bill Shorten MP, has released a
consultation paper with further details of the Federal
Government's 2011-12 Budget announcement to reform the use of
not-for-profit (NFP) tax concessions for unrelated commercial
activities from 1 July 2011.
This consultation paper progresses one of several 2011-12 Budget
announcements for the NFP sector. The other reforms were the
establishment of the Australian Charities and Not-for-profits
Commission (ACNC) from 1 July 2012 and the introduction of a
statutory definition of 'charity' across all Commonwealth
agencies from 1 July 2013.
Other countries have adopted various models for ensuring that
tax concessions are appropriately intended for altruistic
activities and, based on these overseas models, one of the risks
for Australian NFP organisations is that if an organisation
conducts "unrelated commercial activities", it may result
in the loss of its tax-exempt status.
The Government has commenced its consultation process on these
reforms. Moore Stephens will make a submission, as the consultation
paper raises a number of key commercial, structural and taxation
issues for NFP organisations to consider. We are seeking client
input for our submission and request that you provide your comments
and / or answers to some of the key questions listed below to
NFP@moorestephens.com.au by Friday 17 June 2011:
Do you support this proposal?
How will this proposal affect your organisation?
How should this proposal be implemented?
How will this proposal affect the funding of your
organisation's services and activities?
Are there any unintended consequences arising from this
Alternatively, you may wish to take advantage of this
opportunity to provide your own views on these proposed changes and
how they may impact your organisation by making your own
submission. The closing date for submissions is Friday 8 July 2011.
The consultation paper is available on the
For further information, please contact one of our
not-for-profit tax experts - Kate Daly (Sydney West), Stephen
O'Flynn (Melbourne) or Allan Mortel (Sydney) - or your Moore
Stephens relationship partner.
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The income tax treatment of any property lease incentive will vary, depending on the nature of the inducement provided.
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