Australia To Redefine Charity In Law

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

02 November 2011

The Australian government has launched a consultation on a new statutory definition of charity, applicable across all Commonwealth laws from July 1, 2013.

The Australian government announced in the 2011-12 Budget that it would introduce a new statutory definition of charity, and a Consultation Paper has subsequently been released outlining the background, including previous recommendations and inquiries, as well as developments that have occurred since 2003, when the issue was last substantially examined.

The recently published consultation, on which responses are invited until December 9, 2011, seeks to update the definition of a charity, for tax and other purposes.

The consultation follows on from a range of previous inquiries, including the 2001 Report of the Inquiry into the Definition of Charities and Related Organisations, the Charities Bill 2003 and recent court decisions including the High Court's decision in Aid/Watch Incorporated v the Commissioner of Taxation.

Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, explained that: "The current definition of charity is based on the 1601 Statute of Elizabeth, with over 400 years worth of often confusing case law added on top."

He went on to suggest that a single national definition will make it easier for charities to navigate state and federal regulations, allowing them to spend less time on administration and more time helping people.

"Charities make an important contribution to Australian society, and receive a range of support from Commonwealth, state, territory and local governments, in the form of tax concessions and grants, and the public in terms of donations and volunteering," Shorten added. "It therefore is important there is a clear framework for both the public and regulatory agencies for recognizing entities as charitable. The introduction of a definition of charity will, over time, go a long way to provide the sector with the certainty and clarity they are calling for."

The government will also consult on an exposure draft of the legislation in the first half of next year.

Recommended