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Last year, the Queensland Parliament passed a law (the Revenue and Other Legislation Authority Amendment Act 2018 (Qld)) that amended the Queensland state tax law (the Taxation Administration Act 2001 (Qld)) . The change to the law sets out requirements to be met by charitable organisations in Queensland who wish to access (or continue to access) state revenue exemptions such as transfer duty, land tax and payroll tax exemptions.
To qualify as a ‘charitable institution’ for state tax exemptions, an organisation in Queensland must now have express provisions in its constitution or governing documents stating:
- Its income and property will be used solely for promoting its objects
- No part of its income or property is to be distributed, paid or transferred to members by way of bonus, dividend or other similar payment, and
- Its assets must be transferred to another charity upon its dissolution.
If you want to read exactly what the law says see s149C(5) of the state tax law.
Whilst in the past the state tax law did require charitable organisations to have these provisions, a court had decided in 2015 that they did not need to be expressly stated in governing documents (they could be implied). The change to the law means that charitable organisations in Queensland will now need to ensure that these provisions are expressly stated in their constitution (or governing document) if they wish to access state tax concessions.
Charitable organisations that were registered immediately before the changes to the law became effective on 9 November 2018 now have two years to amend their constitutions (governing documents).
If your organisation is concerned about accessing (or continuting to access) state tax exemptions it should review its constitutions (or governing documents) to ensure they meet the new requirements. You can find information on how to make changes to your constitution here. We may be able to help.