Later start date for Better Targeting of Not-for-Profit (NFP) Tax Concessions

The Government announced on 31 January that the 2011‰ÛÒ12 Budget measure Better Targeting of Not-for-Profit Tax Concessions will now commence from 1 July 2014 (not the previous date of 1 July 2012).

The original Budget measure proposed that income tax concessions available to NFPs will only apply to profits generated by the unrelated commercial activities of NFPs, if they are directed to the NFP’s charitable purpose. This means an NFP entity will pay income tax on those profits that are not directed back to its altruistic purpose.

An NFP entity will also not have access to a fringe benefits tax exemption or rebate, goods and services tax concessions or deductible gift recipient support in relation to their unrelated commercial activities. However, commercial activities considered “small-scale” or “low risk” will not be affected by these reforms.

In his press release, Assistant Treasurer, David Bradbury MP said “The Government is committed to working closely with the NFP sector to ensure that any taxation or regulatory changes are designed effectively and with a strong focus on the future of the sector and the needs of the community. This extension will enable further consultation and engagement with the NFP sector on this measure and ensure there is an opportunity for detailed stakeholder input to be provided.”

To view the full statement CLICK HERE

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