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Oct 2004 Non-profit child care providers and access to charity tax concessions |
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Release of fact sheet: Nonprofit child care providers and access to charity tax concessions.
The following information regards the new laws that were introduced on 1 July 2004. From this date a statutory extension to the meaning of charity commenced for the purposes of all Commonwealth legislation. In particular the change allows organisations providing child care services to the public on a nonprofit basis to be treated as charities for tax purposes, provided they meet all the characteristics required of a charity.
Child care providers that are charities because of the new law will be: - eligible to receive charity tax concessions, and
- subject to the endorsement requirements that apply to charities.
To clarify the issues surrounding charity and endorsement, the Tax Office has released a new fact sheet. Some organisations operating nonprofit child care services will already be charities and should not be immediately affected by the changes.
The fact sheet is now available in the Nonprofit organisations section of the ATO website a link to the fact sheet is provided http://www.ato.gov.au/nonprofit/content/48326.htm
Applications requesting endorsement as public benevolent institutions (PBI) A number of endorsement applications have already been lodged by the child care sector. Some applicants have indicated that they believe the organisation to be a public benevolent institution (PBI). A PBI is a nonprofit institution organised for the direct relief of poverty, sickness, suffering, distress, misfortune, disability or helplessness. Examples include hostels for the homeless, disability support services, hospitals and medical clinics, disaster relief organisations, and refugee relief centres.
Most child care providers will not qualify as PBIs. It would only be in exceptional circumstances that a child care provider could be a PBI. An example of a PBI could be a respite centre for children with a disability.
Subscribing to the NonProfit News Service You can be kept up to date on key tax issues affecting the nonprofit sector by subscribing to the free email update service, which includes articles from our electronic NonProfit News Service. A NonProfit News Service article http://www.ato.gov.au/nonprofit/content/48528.htm will release overnight alerting to the new fact sheet.
If you are interested in subscribing directly to the NonProfit News Service log onto the Australian Taxation Office website at www.ato.gov.au/subscription.
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Last Updated ( Tuesday, 26 April 2005 )
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