Restating and Centralising the Special Conditions for Tax Concession Entities

This submission responds to the exposure draft of the Tax and Superannuation Laws Amendment (2014 Measures No. 3) Bill 2014, which restates the ‘in Australia’ special conditions for tax concession entities, including deductible gift recipients (DGRs). Research Australia welcomes the new item 9.1.3 in section 30-80, which allows health and medical research organisations that collaborate internationally to be endorsed as DGRs, but maintains that it needs further change to work as intended. It recommends clearer guidance on what counts as ‘minor’ or ‘incidental’ overseas activity under section 30-18(2), noting that universities conduct about 40% of Australian health and medical research and that their international collaboration is likely worth tens of millions of dollars a year. It recommends that organisations endorsed under item 9.1.3 keep their existing tax concessions, and that the item be amended to replace ‘solely engaged’ with ‘principally engaged’, adopt a broader definition of health and medical research than research into ‘disease’, require that organisations operate principally in Australia and remove the requirement for international collaboration. Failing that, it asks that commercial entities be accepted as collaborators. Citing the roughly 8,000 rare diseases, many affecting children, it also asks that donations to not-for-profit overseas organisations researching rare diseases be tax deductible. An appendix sets out Research Australia’s description of health and medical research.