Third Dimension: Recent Amendments to Queensland Tax Exemptions For Charitable Institutions

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By Alison Sadler, Lawyer

The Queensland Parliament recently passed the Revenue and Other Legislation Amendment Act 2018 (Qld) (Amendment Act). This Amendment Act will have a substantial impact on Queensland charities, which have access to, or are applying for access to, state tax exemptions including transfer duty, land tax and payroll tax. These exemptions can be of significant value to charities.

This article will discuss the new requirements for Queensland charities, and some concerns arising from these new requirements.

What are the new requirements?

The Amendment Act has resulted in a new requirement under section 149C(5) of the Taxation Administration Act 2001 (Qld) (TAA) for a charity to qualify as a ‘charitable institution’. To meet the criteria of a ‘charitable institution’, a charity must now have express provisions in its governing document which state:

  • 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 by way of bonus, dividend or other similar payment to members; and
  • on its dissolution, any assets remaining after satisfying all debts and liabilities must be transferred to another charitable institution.

In addition, the TAA has been amended to make it clear that a constitution may include a statute, deed or other instrument governing its activities or members. 

Why were these amendments required?

The TAA did not specifically state that the restrictions must be expressly included in a charity’s governing document.  Further, the court decided in Queensland Chamber of Commerce and Industry v Commissioner of State Revenue [2015] QSC 77 that the provisions of the TAA did not require these restrictions to be expressly stated. This resulted in many charities being registered as charitable institutions, if the practical effect of their governing documents was that the restrictions were satisfied.

The intention of the Amendment Act is that the charitable institution requirements operate as intended and will provide administrative certainty for both the Office of State Revenue, and for charities.

To whom do the amendments apply?

The amendments will apply to both currently registered charities and charities seeking registration in the future. Some charities which are currently registered will need to amend their governing documents to expressly include the restrictions in section 149C of the TAA in order to continue to qualify for registration. These charities will have two years to amend their governing documents and to work with the Office of State Revenue to ensure they meet the eligibility requirements.

What are the concerns with the new requirements?

The Queensland Law Society put forward a lengthy submission to the Economics and Governance Committee, with a number of concerns regarding the draft bill, including:

  1. trusts may require court involvement and approval to amend their governing documents;
  2. it is unclear whether a charity’s governing document must have the exact wording used in section 149C of the TAA; and
  3. charities will incur significant legal costs to ensure their governing documents meet the requirements in section 149C of the TAA.

Nevertheless, this amendment is now operational. We expect that the Commissioner of State Revenue will introduce a number of public rulings which may address some of these concerns.

What are the consequences of not amending your charity’s governing document?

At the time the Amendment Act was passed, the Queensland Treasurer released a statement that no currently registered charitable institution will lose the benefit of these exemptions as a result of the amendments. However, it is unclear if this will be the case after the end of the two year transitional period. Accordingly, if your charity does not amend its governing document within the two year transitional period it may be at risk of revocation of its charitable institution status, and its access to state tax exemptions. This could have a significant impact on the way your charity operates in Queensland.


In summary, an entity applying for registration as a charitable institution will need to ensure its governing document expressly contains the restrictions in section 149C of the TAA. Also, charities that are currently registered as charitable institutions should check their governing documents to ensure compliance.

For further information, please do not hesitate to contact us.

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