REMOVING TAX BARRIERS TO CROSS-BORDER PHILANTHROPY: Lessons from Australia

Abstract

Australia’s legislative architecture combined with a longstanding government policy focused on fiscal and regulatory concerns together created one of the most restrictive tax regimes for cross-border philanthropy among OECD donor countries. As national boundaries around philanthropy started to blur, the legitimacy of Australia’s domestic tax laws and policy limiting the ability of donors to engage in tax-effective international giving was called into question. The Australian government responded by changing policy course and adopting a more permissive approach to the tax treatment of cross-border philanthropy by removing some of the existing tax barriers and introducing regulatory reforms for charities operating overseas. This chapter examines the implications of Australia’s shift in approach and the lessons for other countries seeking to achieve an appropriate balance between facilitating tax effective cross-border philanthropy while ensuring appropriate oversight of domestic entities engaged in international charitable activities.