On 13 June 2014, the Full Federal Court decided against the
Commissioner in his appeal from Perram J's decision. More
information about Perram J's decision can be found
In the Lower Court, Perram J had determined that an entity like
Hunger Project Australia, which was not directly involved in
charitable aid activities like relief of poverty, (instead being
substantially involved in fundraising operations for such
activities), could nonetheless qualify as a Public Benevolent
On appeal the Commissioner tried to argue that:
The ordinary meaning of "public benevolent
institution" is "an institution that gives or provides
relief directly to those in need" based on passages from
Perpetual Trustee (1931) 45 CLR 224.
Statutory interpretation of the Fringe Benefits Tax Assessment
Act 1986 (Cth) and Estate Duty Assessment Act 1914 - 1928 (Cth)
supports a view that there is a distinction between direct
provision of aid (qualifying for PBI status) and indirect provision
of aid (which does not qualify).
Decided cases such as Perpetual Trustee Co Ltd v Federal
Commissioner of Taxation (1931) 45 CLR 224, Australian Council of
Social Service Inc v Commissioner of Pay-roll Tax (NSW) (1982) 13
ATR 290, and Commissioner of Taxation (Cth) v Royal Society for
Prevention of Cruelty to Animals  1 Qd R 571 consistently
point to the distinction being utilised to restrict PBI status to
only those entities directly providing the charitable aid.
The primary judge erred in relying on Word Investments Federal
Commissioner of Taxation v Word Investments (2008) 236 CLR 204
where the statutory expression "charitable institution"
has a technical meaning different to the ordinary meaning that
determines the concept of "public benevolent
The Full Federal Court (Edmonds, Pagone and Wigney JJ) rejected
all four of the Commissioner's arguments ruling that there was
no authority to suggest that there is a single or irrefutable test
or definition for what constitutes the ordinary meaning of a PBI.
The Court specifically noted the distinguishable factual
considerations in cases that seemed to support the directness
requirement like ACOSS (where the entity was merely
providing advice, research and information rather than dispensing
relief) as opposed to the provision of funds raised for the use of
those funds by others.
The appeal confirms that there is no technical requirement that
to qualify as a PBI, an entity must be directly engaged in the
provision of aid or other relevant charitable relief and that there
is no basis to exclude an institution like Hunger Project
Australia, (a fundraiser) from being a PBI. This decision provides
greater flexibility to charities operating via more modern
structures involving global networks with operational
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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