The Government has announced that the 2011-12 Budget measure “Better Targeting of NFP Tax Concessions” will now commence from 1 July 2014.
The changes require that:
- income tax exempt entities must comply with substantive requirements in their governing rules and being a ‘not-for-profit’ entity;
- income tax exempt entities generally must be operated principally in Australia and for the broad benefit of the Australian community; and
- deductible gift recipients generally must be operated solely in Australia and for the broad benefit of the Australian community.
The start date of 1 July 2014 is proposed to apply to activities that commenced after 7:30 pm (AEST) on 10 May 2011. The measure will not impact on tax concessions that were used for these activities prior to 1 July 2014.
As part of transitional arrangements, relevant activities that commenced prior to 7:30 pm (AEST) on 10 May 2011 will not become subject to the measure until 1 July 2015. The measure will not impact on tax concessions that were used for these activities prior to 1 July 2015.
