TAX BENEFITS FOR ORGANISATIONS PROMOTING PREVENTION OR CONTROL OF

DISEASE OR ILLNESS IN PEOPLE

The Government will legislate to ensure that organisations whose main

activity is promoting the prevention or control of disease or illness

in people can continue to access important tax benefits. These organisations

are integral in promoting good health in Australia and make a significant

contribution to educating Australians about matters such as diet, lifestyle

and disease.

To date these organisations have been considered public benevolent institutions

(PBIs) and were therefore exempt from Fringe Benefits Tax and able to

accept tax deductible gifts. However over time, their activities may have

changed such that they may no longer be considered to be PBIs. This is

because their principal activity may now be indirectly rather than directly

relieving, for example, sickness distress or suffering. Without legislative

amendment, these organisations would lose access to these tax benefits.

In view of this, the Government will legislate to ensure that these organisations

will retain their FBT exemption and will continue to be able to accept

tax deductible donations. The amendments will have retrospective effect

to ensure that there is no break in the eligibility of these organisations

to these benefits.

In addition to these benefits, these organisations will continue to be

income tax exempt as they retain their status as charitable institutions.

While not relevant after 1 July 2000, the Government will also legislate

a sales tax exemption for these bodies (consistent with the exemption

available to PBIs).

Legislation to implement the Governments decision will be introduced

into the Parliament as soon as is practicable.

CANBERRA

22 June 2000

Contact: Michael Ahern (ATO) 02 6216 1493