CSB
MEDIA, JOBS & RESOURCES FOR THE COMMON GOOD
NEWS  | 

Federal Court Affirms Charity ‘Business’ Tax Status


Thursday, 29th November 2007 at 2:21 pm
Staff Reporter
The full court of the Federal Court of Australia has upheld a decision made last November that a charity could raise money through business without paying company tax, as long as the charitable purpose is its only motive for making profit.

Thursday, 29th November 2007
at 2:21 pm
Staff Reporter


0 Comments


FREE SOCIAL
SECTOR NEWS

 Print
Federal Court Affirms Charity ‘Business’ Tax Status
Thursday, 29th November 2007 at 2:21 pm

The full court of the Federal Court of Australia has upheld a decision made last November that a charity could raise money through business without paying company tax, as long as the charitable purpose is its only motive for making profit.

According to tax experts quoted in The Age newspaper the ruling means that charities may seek millions of dollars back from the Australian Taxation Office and may venture into new businesses.

Tax lawyer Duncan Baxter told The Age that the outcome was doubly helpful for charities, because they won the case and because it clearly showed what they could do while staying tax-exempt.

Baxter, the practice head-tax at the law firm, Blake Dawson is reported as saying charities would be well-advised to have a close look at their activities and see whether some can be extended.

The Federal Court ruling relates to the case of a Melbourne funeral business called Bethel Funerals, which is run to raise money for the Not for Profit organisation Wycliffe Bible Translators to translate the Bible into hundreds of different languages.

The business was set up under the name of Word Investment Limited.

Wycliffe’s solicitor, Murray Baird of Moores Legal Services told The Age newspaper that the drying up of government funding for charities, combined with donor fatigue, meant that charities had to become more entrepreneurial to survive.

The Tax Office took the view that they had crossed the line, that churches and charities must not be too entrepreneurial.

But the Tax Office had been over-ruled in the Administrative Appeals Tribunal and the Federal Court, and now the full bench of the Federal Court had confirmed that businesses were not taxable as long as the profits were entirely used for the charity and to advance religion.

The ATO says it is currently considering the implications of the decision and whether it will appeal the decision.




Got a story to share?

Got a news tip or article idea for Pro Bono News? Or perhaps you would like to write an article and join a growing community of sector leaders sharing their thoughts and analysis with Pro Bono News readers?

Get in touch at news@probonoaustralia.com.au

Tags : Taxation,

Get more stories like this

FREE SOCIAL
SECTOR NEWS

YOU MAY ALSO LIKE

Court Decision Points the Way to DGR Category Simplification

Lina Caneva

Tuesday, 24th June 2014 at 11:00 am

NDIS Levy Confirmed

Staff Reporter

Tuesday, 30th April 2013 at 10:44 am

Charity Regulator to Clash with State Regulators

Staff Reporter

Tuesday, 31st July 2012 at 12:16 pm

New Amendment Shores Up NFP Payroll Tax Loophole

Staff Reporter

Wednesday, 25th July 2012 at 2:52 pm

POPULAR

Motivating Factors Protect Against Negative Stress

Wendy Williams

Thursday, 5th April 2018 at 9:34 am

Greens Call for Universal Basic Income

Luke Michael

Thursday, 5th April 2018 at 9:03 am

Animal Shelter Loses Charity Status

Wendy Williams

Wednesday, 11th April 2018 at 5:20 pm

Write a Reply or Comment

Your email address will not be published. Required fields are marked *


CSB
pba inverse logo
Subscribe Twitter Facebook

The social sector's most essential news coverage. Delivered free to your inbox every Tuesday and Thursday morning.

You have Successfully Subscribed!