State Duties and Taxes Exemptions
Exemptions that may be claimed by schools in relation to State duties, pay-roll tax and land tax.
Yes – the exemptions described below will probably apply to your school.
Exemptions may be available to schools in relation to the Duties Act 2000 (Vic), the Pay-roll Tax Act 2007 (Vic) and the Land Tax Act 2005 (Vic).
The various Acts refer to, but do not define, ‘charitable organisations’. The State Revenue Office of Victoria (SRO) administers the Acts and uses the following definition based on common law principles:
‘A charitable organisation is one whose aims and objectives satisfy one of the four heads (or branches) of charity, which are:
- The relief of poverty
- The advancement of education
- The advancement of religion
- Other purposes beneficial to the public.
In order to qualify under any of the above heads of charity except for the relief of poverty, it is important for the organisation to prove both that its purpose is charitable and that it is of benefit to the community as a whole or to an appreciably large section of the community. The organisation should be beneficial to the public and the community should regard the organisation as deserving of public money and worthy of community support.’
The following exemptions may be claimed:
Duties Act 2000
Charitable, religious or educational institutions may claim exemption for:
- Transfers of dutiable property (i.e. land or unlisted marketable securities)
- Declarations of trust over dutiable property (i.e. land or unlisted marketable securities)
Pay-roll Tax Act 2007
Wages paid to persons engaged exclusively in the work of the following organisations are exempt:
- religious institutions
- public hospitals
- non-profit hospitals
- non-profit, non-government schools providing education at or below secondary level
- municipalities (with the exception of wages paid to employees engaged in certain prescribed activities)
- public benevolent institutions
- charitable bodies (other than schools, educational institutions or instrumentalities of the State).
It is important to note that, generally, only wages paid to persons performing services that relate directly to the objects of the body are exempt. Wages paid to persons engaged in commercial or business activities are not exempt, even if the proceeds of those activities are used to further the objects of the body.
Land Tax 2005
Land is exempt if it is used by a charitable institution exclusively for charitable purposes or if it is leased to be used for outdoor sporting, outdoor recreational, outdoor cultural or similar outdoor activities, and is available for use for one or more of these activities by members of the public, where the proceeds from the lease are applied exclusively for charitable purposes.
Director, School Services
Ph. 03 9825 7211