GST and Donation Concessions for Disaster Relief
2 March 2009 at 12:06 pm
The Australian Taxation Office (ATO) has announced GST concessions for disaster relief for certain charitable fund-raising events in the wake of the recent Victorian bushfires and Queensland floods.
The GST concession allows designated charitable institutions, government schools and gift-deductible groups to nominate fundraising events which would normally attract GST to instead be GST-free.
The ATO says that surplus funds generated through the GST concession will allow organisations to generate greater financial assistance for distress relief following the Victorian bushfires and Queensland floods.
The way the surplus funds are used does not affect the GST treatment of the supplies that generated those funds.
An organisation that uses this concession will need to keep a record of their decision for each type of fundraising event. The organisation will not be required to charge GST on the fundraising event and cannot claim GST credits for any purchases or acquisitions they make in relation to the fundraising event.
For GST purposes, a fundraising event is one of the following:
– a fete, ball, gala show, dinner, performance or similar event
– an event where goods other than alcoholic beverages or tobacco products are sold – provided that each sale is for payment that is $20 or less, or
– an event that has been approved by the ATO as a fundraising event.
If an organisation does not choose to use the concession option and still holds the event, supplies made in connection with the event will be subject to GST.
The concession is not available for all fundraising activities and all organisations should contact the ATO to confirm their eligibility. For further information from the ATO on the available tax concessions, see: GST concessions for charitable fundraising
As well the ATO has announced that ‘bucket donations’ of up to $10 provided in response to the bushfires and floods are able to be claimed as a tax deduction in the 2008/09 year without the usual need to provide a receipt.
Donations over $10 will still require a receipt, however if the donation was made over the phone or online, a credit card statement or Internet receipt will be sufficient. For further details from the ATO see: Tips for claiming donations to emergency relief funds
Note: Thanks to PILCH for the plane English explanation of the ATO concession announcement.