Tax Laws Amendment (Political Contributions and Gifts) Act 2010 No. 16, 2010 An Act to amend the law relating to taxation, and for related purposes Contents 1 Short title 2 Commencement 3 Schedule(s) Schedule 1—Political contributions and gifts Income Tax Assessment Act 1997 Tax Laws Amendment (Political Contributions and Gifts) Act 2010 No. 16, 2010 An Act to amend the law relating to taxation, and for related purposes [Assented to 15 March 2010] The Parliament of Australia enacts: 1 Short title This Act may be cited as the Tax Laws Amendment (Political Contributions and Gifts) Act 2010. 2 Commencement This Act commences on the day on which it receives the Royal Assent. 3 Schedule(s) Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms. Schedule 1—Political contributions and gifts Income Tax Assessment Act 1997 8 Section 12‑5 (table item headed "political parties") Repeal the item, substitute: political contributions and gifts denial of certain deductions.................... 26‑22 deductions for individuals..................... Subdivision 30‑DA 9 After section 26‑20 Insert: 26‑22 Political contributions and gifts You cannot deduct political contributions or gifts (1) You cannot deduct under this Act (other than Subdivision 30‑DA): (a) a contribution (including a membership fee) or gift to a political party that is registered under Part XI of the Commonwealth Electoral Act 1918 or under corresponding State or Territory legislation; or (b) a contribution or gift to an individual when the individual is a candidate in an election for members of: (i) an *Australian legislature; or (ii) a *local governing body; or (c) a contribution or gift to an individual who is a member of: (i) an Australian legislature; or (ii) a local governing body. Exception for employees and office holders (2) However, subsection (1) does not apply to a loss or outgoing incurred in gaining or producing assessable income from which an amount is required to be withheld under section 12‑35 or 12‑45 in Schedule 1 to the Taxation Administration Act 1953. Note: These provisions of the Taxation Administration Act 1953 require amounts to be withheld from income of employees and office holders. Starting and stopping being a candidate (3) For the purposes of this section, an individual: (a) starts being a candidate when the individual's intention to be or to attempt to be a candidate for the election is publicly available; and (b) stops being a candidate at the earlier of: (i) the time when the result of the election is declared or otherwise publicly announced by an entity (an electoral official) authorised under the relevant electoral legislation; and (ii) the time (if any) when the individual's intention to no longer be a candidate for the election is publicly available. Starting being a member (4) An individual who becomes a member as a result of an election (including an election that is later declared void) is taken to start being a member when the individual's election as a member is declared or otherwise publicly announced by an electoral official. 10 After subsection 30‑242(3) Insert: (3A) You can deduct the contribution or gift only if: (a) you are an individual; and (b) you do not make the gift or contribution in the course of *carrying on a *business. 17 At the end of section 110‑38 Add: (6) Expenditure does not form part of any element of the cost base to the extent that section 26‑22 prevents it being deducted. Note: Section 26‑22 denies deductions for political contributions and gifts. 18 After subsection 110‑55(9E) Insert: (9F) Expenditure does not form part of the reduced cost base to the extent that section 26‑22 prevents it being deducted. Note: Section 26‑22 denies deductions for political contributions and gifts. 21 Application The amendments made by this Schedule apply in relation to contributions or gifts made on or after 1 July 2008. [Minister's second reading speech made in— House of Representatives on 27 August 2008 Senate on 14 October 2008] (153/08)