GTG
MEDIA, JOBS & RESOURCES for the COMMON GOOD
NEWS  |  Leadership, Politics

Harsh Restrictions on NFPs “Snuck” into Draft Tax Legislation


Thursday, 18th August 2011 at 4:11 pm
Staff Reporter
New draft tax legislation puts additional harsh restrictions on all Not for Profits, according to a Melbourne taxation expert.

Thursday, 18th August 2011
at 4:11 pm
Staff Reporter


1 Comments


FREE SOCIAL
SECTOR NEWS

 Print
Harsh Restrictions on NFPs “Snuck” into Draft Tax Legislation
Thursday, 18th August 2011 at 4:11 pm

New draft tax legislation puts additional harsh restrictions on all Not for Profits, according to a Melbourne taxation expert.

Accounting firm, Moore Stephens has written a submission responding to the draft legislation regarding the “In Australia” requirement for Not for Profits, saying the new restrictions have snuck into the changes.

The submission was lodged with Treasury on 12 August 2011.

Stephen O’Flynn, Tax Director at Moore Stephens Melbourne, met with Department of Treasury (DoT) representatives on Wednesday 17 September to discuss the “Implementation issues related to Better Targeting of Tax Concessions”.

O’Flynn says while Treasury indicated that they were not wedded to the ‘In Australia” requirement there would have to be strong grounds for change.

As a result O’Flynn says Not for Profits need to urgently make submissions to the Government.

He says one of the principle issues with the draft legislation is that the definition of a Not For Profit does not allow distributions to be made to “particular entities” including owners and members.

O’Flynn says this potential change overrides the Federal Court decision in the Word Investments case and may result in loss of NFP status for some NFPs should the legislation be passed.

As well, he says the strict requirement for a NFP to comply with all requirements of its governing rule is his second concern with the draft legislation.

He says this change would mean that even a minor breach of the governing rules would pose a risk to the entity’s tax exempt status.

O’Flynn says Moore Stephens updated submission has also highlighted that a NFP entity will be required to ‘use its income and assets solely to pursue the purposes for which it was established’. It is not clear what is meant by ‘solely to pursue the purposes'.

On 27 May 2011 Treasury released a consultation paper on better targeting of NFP tax concessions.

The Legislation is expected to be finalised by December, 2011.

The full submission can be downloaded here.  




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

Get more stories like this

FREE SOCIAL
SECTOR NEWS

One Comment

Write a Reply or Comment

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



YOU MAY ALSO LIKE

A Dose of Reason, Perspective and Clarity

Mark Fowler

Friday, 3rd August 2018 at 2:59 pm

Canadian Court Protects Charities’ Political Activity

Paul Carter

Monday, 23rd July 2018 at 4:02 pm

The Budget – Beyond Economic Units

David Crosbie

Thursday, 10th May 2018 at 9:04 am

POPULAR

Concerns Raised Over NDIS Barriers for Homeless People With Disability

Maggie Coggan

Tuesday, 7th August 2018 at 8:24 am

NFPs Urged to Focus on Purpose

Luke Michael

Tuesday, 7th August 2018 at 8:27 am

Coordinated Care at Risk Under Marketisation of the NDIS

Luke Michael

Thursday, 9th August 2018 at 8:20 am

Disability Advocates Welcome Pledge to Remove NDIA Staff Cap

Luke Michael

Wednesday, 8th August 2018 at 5:12 pm

GTG
pba inverse logo
Subscribe Twitter Facebook

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

You have Successfully Subscribed!