In the June edition of our Not-for-profit Newsletter we reported on the Full Federal Court ruling in Commissioner of Taxation v Hunger Project Australia [2014] FCAFC 69. It appears now that the Full Federal Court decision will stand for now as the ATO has announced that it would not be appealing the decision.
The Hunger Project has welcomed the decision with CEO Cathy Burke noting that:
"The decision is a real modernising of what it means to be a change maker for international development. Organisations which promote the relief of poverty can look to this case as a precedent. The ability to include the FBT exemption as a tool for attracting and retaining talent to our sector is key, especially as we work to minimise overhead and administrative costs,"
The Commissioner ACNC has also issued an interpretation of the case to provide guidance to ACNC staff, charities and the public application of the law.
The Commissioner noted that the ACNC will be bound by the ruling in that fundraising activities may now be sufficient to constitute an "activity" within the meaning of "institution" and that to be a Public Benevolent Institution (PBI) there is no requirement of "directness" in relation to providing benevolent relief. A charity raising funds for the purpose of benevolent relief can provide relief via related or associated entitles and still qualify as a PBI.
The full ACNC Interpretation Statement can be downloaded from the ACNC website.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
