A taxpayer has been partially successful before the AAT in seeking to be endorsed as a tax exempt entity and a deductible gift recipient (DGR) under the ITAA 1997, the GST Act and FBTAA: AAT Case [2011] AATA 444, Re Bicycle Victoria Inc and FCT (AAT, Ref No 2010/1721-1723, Forgie DP, 24 June 2011).

Background

The taxpayer is an association established for the purposes of promoting cycling in all its forms and for the overall purpose of promoting fitness. It applied to the Commissioner to be endorsed as:

• a DGR for the operation of a fund, authority or institution under s 30-120(a) of the ITAA 1997;
• an income tax exempt charity under s 50-110 of the ITAA 1997;
• a health promotion charity under s 123D of the FBTAA; and
• a charitable institution under s 176-1 of the GST Act.

The Commissioner refused the applications and the taxpayer applied to the Tribunal to review the decision.

Decision

The Tribunal's decision was a very lengthy one and considered a multitude of cases and references.

Income tax exempt entity and charitable institution

Based on the facts, the Tribunal noted that the taxpayer's purpose was to promote cycling and fitness which is of benefit to the general community. The Tribunal said that was a purpose "that has been recognised as charitable". As such, the Tribunal held the taxpayer is entitled to be endorsed as an income tax exempt charity under s 50-110 of the ITAA 1997 on the basis that it is a charitable institution as described in s 50-5 of the ITAA 1997.

The Tribunal also held, based on its previous reasoning as to the purpose of the taxpayer, "it is entitled to be endorsed...as a charitable institution under s 176-1 of the GST Act".

DGR and health promotion charity

The Tribunal said the taxpayer's purpose of promoting cycling in turn promotes health improvements in cyclists but the "[p]revention and control of disease in human beings is not its principal activity". It therefore held the taxpayer "is not entitled to be endorsed as a DGR...under s 30-120(a) of ITAA 1997 and is not entitled to be endorsed as a health promotion charity under s 123D of the FBTAA."