Bicycle Victoria Recognised as a Charity But Denied DGR Status

The Administrative Appeals Tribunal has ruled that Bicycle Victoria is an income tax exempt charitable institution, however it has backed the Australian Tax Office in denying the bicycle lobby group Deductible Gift Recipient status.

The ruling is described by the organisation as a landmark decision.

Bicycle Victoria CEO, Harry Barber says the outcome is a victory for Bicycle Victoria members and for the community.

He says physical activity is ranked second only to tobacco control as the most important factor in disease prevention in Australia.

In 2009 Bicycle Victoria applied to the Australian Tax Office to be granted formal status as a health promotion charity and as a charitable institution, however the ATO refused to endorse Bicycle Victoria on both of these.

Being endorsed as a ‘health promotion charity’ would have meant Bicycle Victoria received deductible gift recipient status and donations of more than $2 to the organisation would be tax-deductible.

Endorsement as a charitable institution means, among other things, that Bicycle Victoria would be exempt from income tax.

Bicycle Victoria appealed the decision, taking it to the Administrative Appeals Tribunal.

On July 24, 2011 the Deputy President of the Administrative Appeals Tribunal handed down a 95 page report which found that that Bicycle Victoria’s purpose was the promotion of cycling in all its forms and the overall purpose of promoting fitness, which is a recognised charitable purpose.

AAT Deputy President S A Forgie said Bicycle Victoria exists for the purpose of promoting cycling in all its forms and for the overall purpose of promoting fitness and  Bicycle Victoria is entitled to endorsement as a charitable institution and exempt from income tax.

Despite finding that Bicycle Victoria is a charitable institution, the tribunal backed the ATO’s findings that Bicycle Victoria should not be endorsed as a ‘health promotion charity’ nor given deductible gift recipient status.

A health promotion charity is recognised as a charitable institution whose principal activity is to promote the prevention or the control of disease in human beings.

The Australian Tax Office says it is currently considering the implications of this decision.

Bicycle Victoria is a Not for Profit organisation with more than 45,000 members, working to get ‘more people cycling more often’.

The judgement can be seen at http://www.austlii.edu.au/au/cases/cth/AATA/2011/444.html

Editors note: In the interests of transparency, Pro Bono Australia Journalist, Ryan Witcombe is a current member of Bicycle Victoria.