Talking points
- An investigation into the church’s practices would look at whether its donors are entitled to claim tax deductions.
- Australian Mormons’ church donations are routed through a charitable trust.
- Tax law says charities must be run from Australia to allow tax deductibility, but the trust has no paid staff, expenses or infrastructure.
Federal Labor and the Greens have called for a Tax Office investigation into allegations the Mormon church has been involved in a significant tax rort in Australia.
An investigation by The Age and Sydney Morning Herald revealed that adherents of the Utah-headquartered Church of Jesus Christ of Latter Day Saints (commonly called Mormons) were able to collect hundreds of millions of dollars in generous tax exemptions that are not lawfully available to followers of other religions.
The Church’s Salt Lake Temple, at Temple SquareCredit:AP
Some of the Church’s tax activities are run through a shell company with no paid employees that is in potential breach of a 2019 Australian Tax Office ruling that the “focal point … in a legal or organisational sense” of a charity must be in Australia for the money to be tax deductible.
Shadow assistant treasurer Labor’s Andrew Leigh said the allegations were serious and called for an immediate investigation.
Labor’s Andrew Leigh said the ATO “should commence an immediate investigation into these allegations”Credit:Dominic Lorrimer
“The Australian Taxation Office should commence an immediate investigation into these allegations, to ensure that tax deductions are only provided where there is a true public benefit,” he said.
“Labor takes any suggestion of tax dodging extremely seriously. We’ve led the debate on multinational tax avoidance, and any suggestion that other multinational entities are seeking to avoid taxes is deeply worrying.”
An Australian Tax Office spokesperson said it could not comment on the tax affairs of any individual or entity due to confidentiality restrictions.
“The ATO uses intelligence from many sources including media reports, information from the public and referrals from other government agencies,” the spokesperson said. “Where, as a result of an assessment, the ATO forms a view that it is necessary to take appropriate action, we will do so.”
Greens treasury spokesman Nick McKim said there was enough information for the Tax Office and Charities Commission to investigate.
“Everyone – people, corporations and religious institutions – should pay their fair share of tax. The generous tax exemptions given to religious organisations should be respected and not exploited,” he said.
Assistant Treasurer Michael Sukkar did not respond to requests for comment.
The media investigation found that in Australia, the Church has ensured that both donations and tithing, a 10 per cent payment from the gross income of the Mormon adherent which is not tax-deductible, are routed through a charitable trust to gain 100 per cent tax deductibility. Australia is unusual among English-speaking countries in that it does not allow tax deductions for tithing or church donations. But it does allow generous deductibility for charitable giving.
The Latter Day Saints Church has structured itself to maximise that tax benefit with up to 70 per cent of its Australian income reportedly spent on charity. This contrasts with the situation globally, where the Church spends under 1 per cent of its income on charity.
It has meant that since 2015 Australian adherents have been able to draw on $400 million in tax deductions not available to followers of other religions.
A Church spokesman did not respond to written questions about this discrepancy in charitable giving from Australia but said the organisation operates in accordance with tax laws.
Its financial accounts show that funds are transferred from the Church’s charitable trust to a separate entity, Sydney-based LDS Charities Australia. From that entity about $70 million a year is distributed to global charitable causes.
LDS Charities Australia, has no paid staff, individual website, expenses or infrastructure to run what purports to be one of the country’s major charities which collects more in individual donations than Oxfam, Beyond Blue or Caritas Australia, the Catholic Church’s international aid charity.
It runs in parallel with the Utah-based Latter-Day Saints Charities which directs the Church’s charitable spending throughout the world and includes all its senior staff, management and infrastructure.
A Church spokesman denied it was run by the Utah-based entity and said it funds projects through other charities including UNICEF, Red Cross and the World Food Programme which allowed it to keep costs low. A local board made all decisions, the spokesman said. “All decisions about which projects are funded are made right here in Australia.”
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