Charities and NPOs given level playing field

Historically the Comptroller of Income Tax, Malcolm Campbell has used UK tax case law to help him decide if a charitable body qualifies for an exemption from Income Tax. The Minister for Treasury and Resources, Senator Terry Le Sueur has now agreed to introduce in this year’s budget, in December, a statutory definition for a charity and a non profit organisation (NPO). This will mean we are no longer reliant upon UK tax case law. However, in order to ensure that this statutory provision in Income Tax law is replicated immediately into GST Law, the Comptroller of Income Tax has now signed two new GST directives to bring the new definition of a charity and a NPO into immediate effect.

The new definition includes all previous definitions but for the first time adds a ‘cultural’ element. It states that the extension to the exemption includes “Non profit organisation established for artistic or cultural objectives and financially supported wholly or mainly by the States of Jersey.” The directives for GST will come into immediate effect and place such qualifying NPOs on the same footing as charities.

Malcolm Campbell commented: “The charitable definition remains the same but we’re extending the way NPOs reliant on States funding are treated for GST so that they are on the same footing as charities. The previous situation was not equitable especially when the body is supported wholly or mainly by the States.”

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Notes to editors:
1) The new definition can be found in GST Direction 2008/11 and is copied below:

“A body that is a CHARITY or a NON PROFIT ORGANISATION shall be relieved of a charge to GST on goods imported into Jersey, if it is established for –

• Advancement of education, or,
• Furtherance of religion, or,
• Relief of poverty, or,
• Purposes beneficial to the community as a whole, or,
• Is a Non Profit Organisation established for artistic or cultural objectives and financially supported wholly or mainly by the States of Jersey.”

2) Direction 2008/12 states:

“A body that is a NON PROFIT ORGANISATION shall be relieved of charging GST on goods and services it supplies if it is established for artistic or cultural objectives and financially supported wholly or mainly by the States of Jersey. Such supplies shall be treated as if they were zero rated for GST.”

3) For further information please contact Robert Fox on 440560
Page Last Updated: 22/04/2008