Word Investments charity tax case update
On 3 December 2008, Australia’s High Court ruled on the long-running case Commissioner of Taxation of the Commonwealth of Australia v Word Investments Ltd.
In a 4-1 decision the High Court has granted Word Investments' appeal against a decision of the Australian Taxation Office (ATO). The ATO had determined that Word Investments’ business activities, which raised funds for another charity, prevented the organisation from being considered ‘charitable’. The High Court has overruled the ATO's decision.
The case clarifies the circumstances in which not-for-profit organisations that raise funds through business or commercial activities will be considered ‘charitable’ and eligible for income tax exemptions.
Some experts have predicted that the case has widened the definition of ‘charitable organisations’ and may open the door for some not-for-profit organisations to re-apply to the ATO for income tax concessions.
For more information about the case and its implications, see our Related Resources section below.
We will shortly be updating our fact sheet: Applying for Tax Concession Charity endorsement which is on our Income Tax page, to reflect the outcome of this decision.
Commissioner ATO v Word Investments 2008 - case notes and commentary