Explanatory Statement

Issued by the Authority of the Minister for Financial Services and Regulation

Income Tax Assessment Act 1997

Income Tax Assessment Amendment Regulations 2001 (No. 1)

Section 909-1 of the Income Tax Assessment Act 1997 (the Act) provides that the GovernorGeneral may make regulations for giving effect to the Act.

Section 50-5 of the Act lists various types of charitable, educational, scientific and religious entities that are exempt from income tax under section 50-1. In some cases, special conditions must be satisfied; for example, charitable or religious entities are subject to the conditions listed in section 50-50.

Paragraph 50-50(d) provides that an institution that has a physical presence in Australia, but which incurs its expenditure and pursues its objectives principally outside Australia, is exempt from income tax only if it is prescribed in the Income Tax Assessment Regulations 1997 (the Regulations).

In accordance with the Government's decision, Regulation 50-50.01 is amended to include four organisations as prescribed institutions for the purpose of paragraph 50-50(d) of the Act. Inclusion as a prescribed institution for the purpose of paragraph 50-50(d) ensures that the following institutions are exempt from income tax under section 50-1 of the Act:

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Australasian Christadelphian Mission Incorporated;

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Mango Tree Foundation Limited;

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Orphans Refugees Aid International Incorporated; and

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Trustees of the Marist Missions of the Pacific.

The proposed Regulations are taken to have commenced on 1 July 1997, the date from which section 50-50 took effect. Such retrospective application is required to ensure that the tax exempt status of these organisations continues uninterrupted in income years following the enactment of section 50-50. As the amendment benefits the listed organisations, it does not contravene subsection 48(2) of the Acts Interpretation Act 1901. Subsection 48(2) prohibits the retrospective operation of regulations which adversely affects the rights of, or imposes liabilities on a person.