Accompanying the introduction of ACNC is a new "In Australia" test which an income tax exempt entity must satisfy if it wishes to retain exemption and concessions.
A new draft definition of "in Australia" states that such an entity must operate principally in Australia.
There is some provision for some funds which can be sent overseas, or donated to non charities, but overall the entity must have most activities here, be managed here, and incur expenditure here.
Funds from bequests, government grants or donations which did not receive a tax deduction, can be sent overseas provided strict governance is observed and the local entity can trace how the funds are used.
For a deductible gift recipient, the test is stricter: the DGR must:
- operate solely in Australia; and
- pursue its purposes solely in Australia.
Overseas aid funds and developed country relief funds are exempt from this test.
Fund entities on the Register of Environmental Organisations are also exempt.
We will continue to provide updates as changes occur.
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.