Tax Planning Strategy 130 | Sponsorship
Sponsorship is defined by the Cambridge Dictionary as ‘the act of supporting a person, organisation, or activity by giving money, encouragement, or other help’.
The Avon Descent is a 124km power dinghy and paddle boat race from Northam to Bayswater (see www.avondescent.com.au). The main sponsors are Tourism WA, Lotterywest, act belong commit, Healthway, The Sunday Times, and ten network. These sponsors provide a mixture of cash, promotion, advertising, and logistics support.
The sponsors are a combination of government departments, not for profit organisations’ and profit seeking businesses. Sponsors undertake sponsorship to meet their specific organisational goals, the Avon Descent sponsors’ objectives are:
- The Sunday Times and ten network wants to achieve increased sales and enhanced image.
- Tourism WA wants to promote tourism in the Avon Valley region.
- Act belong commit wants to encourage community activities, belonging and commitment.
- Healthway wants to encourage improved health in the community.
Sponsorship will be deductible to a business if it is undertaken to benefit the business and generate future income. Deductibility is based on the business owner’s intent and not whether the sponsorship actually generates any future income.
"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"
- Bono: U2