Proposed NFP reform may not proceed but further consultation is welcome


11 November  2013:  Last week the Treasurer and Assistant Treasurer announced the Government’s position regarding a backlog of 96 announced but unlegislated tax and superannuation measures.

Of the unenacted measures, the Government has identified that the changes to not-for-profit and charitable entities will be subject to further consultation which will be expedited and finalised over the next two weeks with a disposition not to proceed with the measures.

The unenacted measures include:

  • Not-for-profit sector reforms — better targeting not-for -profit tax concessions. Protects the government’s revenue base by ensuring that tax concessions provided to not-for-profit entities are targeted only at those activities which further their altruistic purposes.
  • Philanthropy — reforming the ‘in Australia’ requirements that apply to tax exempt entities. Re-states and clarifies the ‘in Australia’ special conditions for income tax exempt entities and deductible gift recipients to ensure that the relevant entities operate principally in Australia.
  • Philanthropy — triennial review of the deductible gift recipient registers. Provides a mechanism to conduct a triennial review of the guidelines for, and organisations on, DGR registers to assess the scope for administrative and policy reform.
  • Philanthropy — improving administration of the cultural gifts program. Transfers responsibility for administering the cultural gifts program from the Ministry for the Arts to the ATO to streamline processes and reduce red tape for donors.
  • Definition of ‘not-for-profit’ in the tax laws. Provides a definition of ‘not-for-profit’ in the tax laws.

“Reform to support, grow and strengthen the NFP sector is welcome, however we should not add to the existing regulatory burdens within the sector. The government’s decision to prioritise a review of these enactments should reduce the uncertainty that has been hanging over much of the NFP sector in recent times.  Consultation with the sector is important, whether the enactments proceed in their current form or not,” said Gaile Pearce Deloitte Private Partner.

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