Australia Gives Tax Breaks For Earthquake Relief

by Mary Swire, Tax-News.com, Hong Kong

24 February 2011

The Australian Assistant Treasurer Bill Shorten has announced that the earthquake which hit the New Zealand city of Christchurch yesterday has been recognized as a disaster for tax purposes.

This will allow Australian taxpayers to claim an income tax deduction for donations to the relief effort.

"So far this tragic event has claimed the lives of many people and there have been numerous reports of injuries. The death toll is sadly likely to rise. Aftershocks are expected to continue and this could lead to further building damage or collapse, as well as continued disruption to power, telecommunications and essential services," Mr Shorten said.

"The sympathies of the Australian Government and all Australians are with the people of Christchurch and New Zealand at this time."

This declaration means that public funds established and maintained by a public benevolent institution solely to provide money for the relief of people in New Zealand, who are in distress as a result of the Christchurch earthquake, can be endorsed as ‘developed country relief funds'.

Funds still need to apply to the Australian Tax Office (ATO) for formal endorsement, and the ATO has established a fast track process for this purpose.

"The Red Cross and the Salvation Army have advised that they are establishing disaster relief funds to help the people of Christchurch. Further information on how to make donations will be available from their websites," the Assistant Treasurer said.

Donations to such funds are tax deductible for a period of two years from February 22, 2011. Taxpayers should ensure that they retain a receipt for their donation.

The Australian Government has recognized other overseas disasters for the purposes of tax deductibility in the past, including the bush fires in Greece in August 2007, the Abruzzo earthquake in Italy in April 2009 and the Taiwan typhoon in August 2009.

Recommended