Gift-exempt bodies

Explaining Gift Exempt Bodies 

Sections 18K, 32 and 58 of the TAA provide for a gift exempt body to keep records and provide returns, showing the sources and application of donations. Additionally, they allow the Commissioner to notify the Minister of Revenue if he believes the funds of a gift-exempt body are being applied for a purpose that is not charitable, benevolent, philanthropic, or cultural.

A gift exempt body is defined as any overseas donee organisation listed in schedule 32 of the ITA or any person who has RWT-exempt status following an application made under section 32E(2)(k) or (l) of the TAA. The definition is currently limited to persons that apply RWT-exempt status. As charitable trusts registered under the Charities Act 2005 are automatically provided with RWT exemption without having to apply, they are excluded unintentionally from the gift-exempt body definition under current legislation.

Proposed Amendments likely to be in 2024

The amendments proposed would ensure that all charities registered under the Charities Act 2005 are included within the definition of a gift exempt body so that they are subject to the integrity provisions relating to the source and application of donated funds. The amendment would also ensure that those exempt entities and not-for-profit organisations eligible to apply for RWT-exempt status under section 32E(k) or (l) of the TAA are included within the definition of a “gift-exempt body”, and therefore subject to the integrity rules, regardless of whether they have applied for RWT exempt status.

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