Public benevolent institutions
30 June 2010
A public ruling, when issued, is the published view of the Commissioner of State Revenue (the Commissioner) on the particular topic to which it relates. It therefore replaces and overrides any existing private rulings, memoranda, manuals and advice provided by the Commissioner in respect of the issue(s) it addresses.
Where a change in legislation or case law (the law) affects the content of a public ruling, the change in the law overrides the public ruling—that is, the Commissioner will determine the tax liability or eligibility for a concession, grant or exemption, as the case may be, in accordance with the law.
What this ruling is about
- The various state taxation statutes1 administered by Queensland Revenue Office each provide exemptions, in certain specified circumstances, from the relevant state taxes for organisations which are registered as charitable institutions.
- The relevant statutes define a charitable institution as being an institution registered under Part 11A of the Taxation Administration Act 2001. Charitable institutions can encompass a number of specific categories of organisations covering educational, religious and public benevolent activities. Also, an institution may be registered if its principal object or pursuit is fulfilling a charitable object or promoting the public good (not being an object or pursuit that is a leisure, recreational, social or sporting object or pursuit).
- This public ruling explains the Commissioner’s view of when institutions are charitable institutions on the basis that they are public benevolent institutions.
- The terms of each of the relevant statutes must also be satisfied if an institution which qualifies as a charitable institution is to obtain an exemption from the relevant state taxes in relation to a particular matter.
- Public Ruling GEN003—Charitable institutions sets out the Commissioner’s approach to determining whether an institution qualifies as a charitable institution. This public ruling should be read in conjunction with that ruling.
Ruling and explanation
- The meaning of ‘benevolence’ which has been generally accepted is that given in Perpetual Trustee Co Ltd v Commissioner of Taxation (Cwlth)2 where Dixon J. said that a public benevolent institution means an institution organised for the relief of poverty, suffering, distress or misfortune.
- In Australian Council of Social Service Inc v Commissioner of Pay-roll Tax (NSW),3 the New South Wales Court of Appeal held that the Council was not a public benevolent institution. Priestly JA, with whom Mahoney JA agreed, said at 4241—4242:
- In determining whether an institution is a public benevolent institution, the number and characteristics of the persons benefited by the institution in question are determinative of the question. What is required is that a section of the public benefits from the institution’s activities rather than some benefit being conferred upon the public as a whole.
- Some of the factors to which regard will be had include:4
- constitution of the organisation
- membership of the managing and governing body
- sources of moneys
- its public accountability
- class or classes of recipients of its benevolence
- scope and nature of its work
- whether fees are payable by recipients and, if so, their nature
- whether the overall work is beneficial to the public at large.5
- Status as a public benevolent institution is not lost by the institution’s involvement in other non-benevolent incidental activities.
Charging for services
The fact that an institution charges for services does not preclude it from being characterised as a public benevolent institution.6
- Notice will be taken of the fact that the recipients of the institution’s benevolence are Aboriginal persons as that gives a special character to the institution’s purposes which may render an otherwise neutral purpose, charitable. However, each case will still be considered on its own merits.
- There have been a number of cases7 where judicial notice has been taken of the plight of Aboriginal persons.
- The cases in which Aboriginal organisations have been held to be public benevolent institutions concerned Aboriginal persons clearly in need of assistance and who epitomised the Aboriginal persons referred to in judicial pronouncements concerning the plight of Aboriginal persons generally. That may not be so in every case. Consequently, the Commissioner will consider the facts of each case.
- Judicial notice is taken of the fact that Aboriginal persons are a disadvantaged section of the public. Consequently, an Aboriginal housing society would ordinarily be engaging in the relief of poverty, suffering, distress or misfortune. However, there may be special factors that preclude this conclusion.
Public v private benefit
- A public benefit in the organisation’s activities must be established before an institution can be regarded as a public benevolent institution.
- The public benefit required is in the sense that a section of the public benefits from the organisation’s activities rather than some benefit being conferred upon the public as a whole.8
- This requirement differs to that for institutions seeking to qualify as being engaged in the relief of poverty (where no public benefit is required).
Date of effect
- This public ruling takes effect from the date of issue.
Commissioner of State Revenue
Date of issue: 30 June 2010
|Public Ruling||Issued||Dates of effect|
|GEN005.3||30 June 2010||30 June 2010||Current|
|GEN005.2||3 July 2009||30 June 2009||29 June 2010|
|GEN005.1||24 February 2009||24 February 2009||29 June 2009|
|Supersedes Revenue Ruling G 4.3||1 July 2005||1 July 2005||23 February 2009|
- Duties Act 2001, Payroll Tax Act 1971 and the Land Tax Act 2010 (collectively, the relevant statutes)
- (1931) 45 CLR 224
- (1985) 85 ATC 4235
- Tangentyere Council Inc v Commissioner of Taxes (NT) (1990) 90 ATC 4352
- Refer to requirements stated in paragraph 8 above.
- Commissioner for Pay-roll Tax (Vic) v Cairnmillar Institute (1992) 92 ATC 4307
- In re Mathew (1951) VLR 226 at p.232, Aboriginal Hostels Ltd v Darwin City Council (1985) 55 LGRA 414 at p.211, Nungera Co-operative Society Ltd v Maclean Shire Council (1991) 73 LGRA 178
- Australasian Council of Social Service Inc. v Commissioner of Pay-roll Tax (NSW) (1985) 85 ATC 4235