In the past, the ATO has held a view that Public Benevolent Institutions had to provide services to individuals in Australia in order to be eligible for deductible gift recipient status and fringe benefit tax exemptions. As a result, some Public Benevolent Institutions with overseas activities had to set up Public Ancillary Funds and worked with 9.1.1 Overseas Aid Funds to enable donors to receive income tax deductions for their gifts.
Following the Word Investments Case and the more recent Hunger Project decision, the ATO has changed its position. It now considers that charities only need be established and operating in Australia to be eligible for those tax concessions. This means that some charities will now be able to offer donors tax deductibility and to conduct overseas programs without using either Public Ancillary Funds or 9.1.1 Overseas Aid Funds. This may be a considerable cost saving. If you think this may apply to your organisation, please contact us to discuss further.