Tax law reforms to strengthen Australian philanthropy
Peak philanthropic body is hopeful that tax law reforms passed through Senate will ensure “a healthy, vibrant culture of giving in Australia will continue well into the future.”
The government says the reforms will see an overhaul of the regulation of private philanthropic funds, by simplifying and centralising the process of establishing and monitoring such funds.
Philanthropy Australia is excited about the development. “We believe that the simplification of the legal and regulatory framework will help philanthropy continue the exceptional growth it has shown over the past decade,” a spokesperson said.
“Ultimately, the aim of the new legislation and the accompanying guidelines (which haven’t yet been released in their final form) is to make it easier for everyone to administer, monitor, and comply with the regulations.
“Having a robust, tax-effective structure in place, which everyone understands, is going to be a substantial incentive to high net worth individuals to commit funds to the community.”
Now to be referred to as private ancillary funds (previously prescribed private funds), the administration of these important philanthropic vehicles will now be at the discretion of the Commissioner of Taxation.
“The regulatory framework is clearer, which means people who establish Private Ancillary Funds (formerly known as Prescribed Private Funds) will better understand what is required of them and what they are able to achieve with the structure. Bringing the entire administration of the PAF regime under the authority of the ATO is also going to make the process of establishing a PAF much simpler and quicker,” a Philanthropy Australia spokesperson commented.
Philanthropy Australia also praised the process through which the reforms were undertaken. “We’re very happy that there continues to be interest in refining the structures available for establishing giving vehicles. We were also very pleased that Treasury undertook a wide consultation process in relation to this legislation, meaning that Philanthropy Australia, its members and the wider philanthropic community were all able to have input into our sector’s future. It bodes well for a healthy, vibrant culture of giving well into the future.”
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