Tax-deductible opportunities for Indigenous charities
Australian school for Aboriginal students becomes Public Benevolent Institution, gaining tax benefits. Other Indigenous organizations may also qualify.
Following a recent application submitted to the Australian Charities and Not-for-profits Commission (ACNC), a private school located in a remote part of Australia was approved to be a Public Benevolent Institution (PBI).
The school, focused upon educating Aboriginal members of its local community, was previously registered as a charity for the purpose of advancing education.
Becoming a PBI has huge implications for any organisation, especially those employing a large number of staff. The school therefore becomes exempt from Fringe Benefits Tax (FBT) for benefits provided to each employee up to a total grossed-up value of $30,000. The school also becomes a deductible gift recipient (DGR), therefore ensuring that donations of over $2.00 to the school can be tax-deductible. Importantly, these funds can be used by the school for all of its operations and not just e.g. for scholarships or building maintenance.
This incredible tax benefit which is not enjoyed by most schools in Australia is due to the ACNC’s definition of PBI. Regularly, schools are not PBIs. However, the ACNC Commissioner’s interpretation statement regarding PBIs clarifies, at paragraph 5.3.2 that:
“An organisation with a purpose of addressing Indigenous disadvantage will ordinarily be considered to be providing assistance to “people in need”. To qualify as a PBI, the organisation must provide services targeted at those needs.”
A further ACNC interpretation statement regarding Indigenous charities confirms that the ACNC
“Recognises the unique situation of Australia’s Indigenous peoples and recognises their disadvantage.”
For the purposes of eligibility to be registered as a charity, “an organisation with the purpose of addressing Indigenous disadvantage is accepted as coming within the first head of charity: relief of poverty or impotence, depending on the circumstances.” An organisation is able to address this disadvantage through providing services such as health, welfare or education services. Specifically, the interpretation statement confirms that disadvantage may be addressed in the form of a bi-lingual school.
The implication of the current regime is that organisations that are working specifically with Aboriginal peoples or Torres Strait Islanders may be able to become PBIs and enjoy the consequent tax benefits. This situation may arise for organisations, such as schools, that may not be recognised as PBIs for work performed with other communities.
We are happy to advise any organisation working with Aboriginal peoples or Torres Strait Islanders who may wish to maximise the potential tax benefits that they can receive to enhance and improve their operations.
You may also be interested in
Client Testimonials
EXCELLENT Based on 36 reviews Posted on Ethan Dehghan2025-09-14Trustindex verifies that the original source of the review is Google. I had an excellent experience with Sajad Alobaidi when buying my house. He explained the contract clearly, was always responsive, and made the whole process smooth and stress-free. Highly recommend Warlows Legal and Sajad for property purchases! ⭐⭐⭐⭐⭐Posted on Zahra Ahmadi2025-09-10Trustindex verifies that the original source of the review is Google. One of the best lawyers and his team they are very supportive and very helpful and when it comes to doing the job they do it 100% without any delays Thank you so much to Sam and Sajad for everythingPosted on Arie Kliger2025-03-12Trustindex verifies that the original source of the review is Google. Thanks to Roni Margolin for very professional legal services. Roni performed at high standard representing me in negotiations and court proceedings. She exhibited knowledge, experience and commitment. She kept me informed and discussed matters with me regularly. Warlow Legal have provided me with professional services and I highly recommend them.Posted on Hus Melbourne Best2025-02-17Trustindex verifies that the original source of the review is Google. Dealing with the team is easy and response is quick and efficient. They are reasonable with prices and seems very reasonable to the clients. Have a building matter as a Builder and they helping very smartly. Great full to Harriet for taking matter with interest and helping with care. F HussainPosted on Avi Bendetsky2024-12-09Trustindex verifies that the original source of the review is Google. Great firm highly recommend them!!Posted on Rivky Cyrulnik2024-11-22Trustindex verifies that the original source of the review is Google. Thanks Harriet for your help and advice with our build. I am so happy I listened to you. It was a difficult dilemma but well worth following the advice in the long run. Spot on advice. Also thanks to Yoni for his help with our contract. Warlows has great experience with building law and contracts Thank you!Posted on Miriam Pacanowski2024-09-09Trustindex verifies that the original source of the review is Google. Harriet and her team really cared about our charity and helped us through the many steps required to enable us to achieve DGR status. They were professional and responsive and achieved a fantastic outcome.Posted on Lazer Toggos2024-03-07Trustindex verifies that the original source of the review is Google. Harriett and Caroline were very professional and listened very carefully They showed understanding and compassion I could not rate them higher Their work was excellent and went the extra mile Would highly recommendPosted on Schneier Lange2023-11-02Trustindex verifies that the original source of the review is Google. Harriet and her team are very professional and personable and easy to deal with. They go the extra mile to get the job done and showed great care for a positive result. Recommend to anyone wanting a good experience.Posted on Yossi Friedman2023-09-26Trustindex verifies that the original source of the review is Google. Harriet and her team have been so generous in their advice and support of my new venture and I am so grateful for all their assistance
Please call us to arrange an initial consultation
Our expertise in our respective fields is widely acknowledged. Drawing upon our practical experience, we consistently produce the positive and reliable results our clients expect. We would love to stay connected with you and keep you up to date with all relevant legal issues and expertise.
Subscribe to our email updates by entering your email below, or simply message or call us on +61 3 9212 0238