The Assistant Treasurer has released for public consultation a revised exposure draft of legislation that will restate the 'in Australia' special conditions for tax concession entities by ensuring that:
- 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.
Initial consultation on the exposure draft legislation to reinstate the 'in Australia' special conditions for tax concession entities closed on 12 August 2011. The Government acknowledges that the released draft legislation had some issues. The revised draft incorporates changes following public consultation.
Restating the 'in Australia' special conditions will provide support to the anti-avoidance measures in the tax law which limit income tax exempt entities expending money offshore and ensure tax supported funds remain in Australia.
The 'in Australia' special conditions provide additional measures to address possible abuse of not-for-profit entities for the purposes of money laundering and terrorist financing, and ensure the proper operation of not-for-profit entities, their use of public donations and funds, and the protection of their assets.