High Court rules in favour of charities

The High Court of Australia recently bought down its ruling on the long running test case on income tax exemptions for charities undertaking business activities.

The High Court ruled that businesses run by charities for the purpose of raising funds for charitable purposes need not pay tax. The Tax Office had appealed the original decision handed down by Justice Sunberg in the Federal Court and subsequently endorsed by Full Bench of the Federal Court.

The case involved the business of Bethel funerals, which was run by Word Investments Ltd.  The profits of the Bethel Funerals business were used to support Wycliffe Bible Translators, a charitable institution providing funds for overseas missionary and bible translating activities.

The four-to-one ruling confirmed again that profits from Bethel Funerals were exempt from taxation. The Court stated that the principal issue in whether an organisation was charitable was its purposes, not just its activities.

Read the High Court media release

Published : 8 December 2008