| Tax | Exemption |
|---|---|
| Transfer duty | A dutiable transaction is exempt from transfer duty if it has been entered into for charitable purposes. |
| Land tax | Land is exempt from land tax if it is owned by, vested in or held in trust for a public charitable or benevolent institution and used for charitable purposes. |
| Payroll tax | Wages paid by charitable bodies are exempt from payroll tax if they are paid in connection with a charitable purpose. |
Separate eligibility criteria apply for each tax. Make a separate application for each tax liability. Being eligible for an exemption for one tax does not exempt you from the other taxes.
See more information in the Charitable Exemptions revenue ruling.
Charitable purposes
Show moreThe Commissioner may:
- grant an exemption from tax for certain charitable bodies
- exempt a transaction that has been entered into or occurred for a charitable or similar public purpose.
A body will be charitable if its main or dominant purpose is a charitable purpose. For a body or transaction to have a charitable purpose, the purpose must be recognised by common law in Australia as being charitable.
Charitable purposes are divided into four categories, commonly referred to as the four heads of charity.
| Heads of charity | Examples of charitable purposes |
|---|---|
| First head Relief of the aged, impotent and poor |
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| Second head Advancement of education |
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| Third head Advancement of religion |
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| Fourth head Other purposes beneficial to the community |
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The fact that a taxpayer may be recognised as a charity by another agency, such as the Australian Charities and Not-for-profits Commission (ACNC), will not independently satisfy the Commissioner that the taxpayer is a charitable body.
Duties
Show moreA similar public purpose doesn’t have to be characterised as being ‘charitable’ under common law principles. It is generally accepted to mean a purpose of providing some service, utility or benefit to the public that would not otherwise be provided and which is not provided with the primary purpose of producing a profit.
To determine if a dutiable transaction or acquisition was entered into or occurred for a charitable or similar public purpose, the Commissioner will consider the purposes for which the property was acquired. This means the taxpayer does not necessarily have to be charitable body.
Provide the transaction record (e.g. offer and acceptance contract or transfer of land) with your application.
- If your transaction involves land, lodge the 'Foreign Transfer Duty Declaration’.
- If you have made a landholder acquisition, also lodge the ‘Landholder Acquisition’ form and 'Foreign Landholder Duty Declaration'.
The exemption does not apply if the person liable to pay duty is a relevant body, or related to a relevant body, unless a beneficial body determination is in force for that relevant body.
Land tax
Show moreA taxpayer is a public charitable or benevolent institution if its main purpose is charitable. To establish this, the Commissioner will consider the taxpayer’s purpose at the time it was established and the taxpayer’s activities on 30 June in the financial year before the assessment year.
- Use of the land for charitable purposes is determined by comparing the charitable purposes of the taxpayer with the actual use of the land.
- The taxpayer’s intended future use of the land is not relevant.
- A partial exemption may apply where only part of the land is used solely for the taxpayer’s charitable purposes.
Make a separate application for exemption each time new land is acquired.
A public charitable or benevolent institution does not include a relevant body unless a beneficial body determination is in force for that relevant body.
Payroll tax
Show moreWages paid by a charitable body or organisation are exempt if they are paid in connection with a charitable purpose for which the body is carried on.
You can request confirmation from the Commissioner that you are exempt as a PBI. The Commissioner will determine if the following requirements are met:
- its main or principal object is the direct relief of poverty, sickness, suffering, distress, misfortune, destitution or helplessness
- it is carried on without purpose of private gain for particular persons
- it is established for the benefit of the general public, or a large section or class of the public and
- relief is available without discrimination to every member of the public which the organisation aims to benefit.
| If you are registered for payroll tax | Apply for an exemption to commence at the start of the financial year in which the application was made. |
|---|---|
| If you have never been registered for payroll tax | Apply for an exemption to commence at the start of the financial year that is five years before the financial year in which the application was made. |
The Commissioner cannot give an exemption to a charitable organisation or organisation that is a relevant body unless a beneficial body determination is in force.
Relevant bodies
Show moreA relevant body cannot receive a charitable exemption from duties, land tax or payroll tax.
A relevant body includes
- political parties, industrial associations and professional associations
- a body (other than a political party, industrial association or professional association) that promotes trade, industry or commerce, unless its main purposes are the relief of poverty, advancement of education or advancement of religion
- a body that
- is a member of a payroll tax group with a relevant body or
- is a related body corporate of a relevant body or
- has a sole or dominant purpose or object to confer a benefit on a relevant body.
An exemption is not available to a taxpayer that is a relevant body unless they have received a beneficial body determination. An application for a beneficial body determination can only be made after the Commissioner has refused to grant an exemption on the sole ground that the taxpayer is a relevant body.
For more information, see the Charitable Exemptions revenue ruling.
Beneficial body determination
Show moreThe Minister for Finance may, with the Treasurer's concurrence, make a beneficial body determination if it is in the public interest to do so.
- A beneficial body determination reinstates the entitlement to the charitable exemptions.
- A relevant body that is an industrial association or political party cannot make an application.
Apply to the Minister for Finance for a determination that a relevant body is a beneficial body for the purposes of the taxation Acts if
- the Commissioner has refused to give a charitable exemption on the sole ground that the taxpayer is, or is related to, a relevant body and
- all objection and review proceedings have been exhausted, discontinued or fully determined, or all objection or review rights have been surrendered by the taxpayer and
- the application is made within 60 days after the objection or review rights have been finalised or surrendered, as applicable.
