Charities: Commercial activity, competitive neutrality and tax

Published on 01 Feb 13 by "THE TAX SPECIALIST" JOURNAL ARTICLE

This article looks at the proposal to impose tax on the commercial activities of charities. The proposal arose following the 2008 High Court decision in FCT v Word Investments Ltd where it was held that an entity that engaged in commercial activities in aid of its religious charitable purpose was a charity (in that case, a charitable institution). The stated rationale for the proposal to tax some commercial activities of charities includes concerns about unfair competition.

This article considers this and other rationales to see whether they can be justified from a policy perspective.

Author profiles

Dr Fiona Martin CTA

Fiona is a Professor of Taxation and Business Law School of Taxation & Business Law UNSW Business School University of New South Wales. - Current at 29 May 2019

More by Fiona MARTIN

• Unincorporated associations: Legal and tax consequences - 01-March-2019
• The income tax exemption of charities and the tax deductibility of charitable donations: The United States and Australia compared - 01-December-2018
• Tax deductibility of philanthropic donations: Reform of the specific listing provisions in Australia - 01-September-2018
• Tax compliance and cultural values: The impact of “individualism and collectivism” on the behaviour of New Zealand small business owners - 01-July-2016
• “Settlement or declaration of trust” for CGT event E1 and native title - 01-April-2016
• Has the Charities Act 2013 changed the common law concept of charitable “public benefit” and, if so, how? - 01-March-2015
• Overseas travel by employees: When does FBT apply? - 01-February-2015
• Does CGT event C2 apply when a beneficiary’s interest in a trust ends? - 01-December-2013
• Law, policy and politics in Australia’s recent not-for-profit sector reforms - 01-July-2013
• The mining withholding tax under Division 11C of the Income Tax Assessment Act 1936: It may be simple but is it equitable? - 01-February-2012
• The Henry Review’s recommendations for the not-for-profit sector - 01-August-2010
• The legal concept of charity in the context of Australian taxation law : The public benefit and commercial activity, important issues for indigenous charities - 01-July-2010
• Charitable purpose and the need for a public benefit: A comparison of the tax treatment of Australian and New Zealand charities for indigenous peoples - 01-July-2009
• Is it time for an independent regulator of the non profit sector in Australia? - 01-February-2009
• What's public benefit got to do with it? How the law in Australia relating to the public benefit requirement of 'charitable' applies to charities for the benefit of Australian indigenous people - 01-April-2006
• The Commissioner's Powers of Access in Context - 01-December-2004
• The Interaction between Capital Gains Tax and the Main Residence Exemption - 01-May-2003
• Capital gains tax - 01-February-2002
• STS implications - 01-November-2001
• Goods and Services Tax: Charities and the GST - 01-August-2000
• Goods and Services Tax: the effect on real estate - 01-September-1999
• Goods and services tax: the effect on property transactions - 01-August-1999
• The Goods and Services Tax and Property Transactions - 10-June-1999
• The GST and its Effect on Real Estate - 14-May-1999
• Forgotten reforms: the non-GST ANTS bills - 01-February-1999
• Real estate: development and disposal - 01-November-1998
• Real estate: development and disposal - 01-October-1998

Click here to expand/collapse more articles by Fiona MARTIN.

Ann O'CONNELL

Ann is a Professor, Law School, Fellow, Monash University, Melbourne.
Current 1 December 2014

More by Ann O'CONNELL

• Is the tax regime for charities and not-for-profit entities “fit for purpose”? - 01-July-2023
• Law, policy and politics in Australia’s recent not-for-profit sector reforms - 01-July-2013
• The not-for-profit sector and the tax forum - 01-April-2012

Click here to expand/collapse more articles by Ann O'CONNELL.