ACNC Registration and ATO Tax Exemptions
For Charities in Australia it is not enough to be structured as a not for profit entity, you have to:
– be registered with the ACNC as a Charity; and
– have the correct endorsements from the Australian Tax Office in order not to be a tax payer.
Additionally it is not enough to say that you have a letter from the ATO stating that you have a particular tax endorsement. The onus is on the leadership of your organisation to ensure that an annual review and self audit is conducted to ensure that:
- you have the correct endorsement(s)
- you are still entitled to that endorsement(s)
What Charity Tax Exemptions and Concessions are available to my organisation?
This requires careful analysis and advice on questions like:
1. What type of charitable activity is conducted?
2. Is your Institution or Fund a Tax Concession Charity or a Deductible Gift Recipient (DGR)?
3. Is a Gift Fund (DGR) endorsement available as part of your Charitable Institution? If so:
- what rules do we need for our Gift Fund?
- what separate endorsement(s) should be in place for the Gift Fund?
- what are the accounting and record keeping requirements for the Gift Fund?
4. Is there any non-charitable activity and if so the extent of that activity? What level of non-charitable activity will lead to a loss of entitlement for endorsement?
5. How do “commercial activities” affect our endorsements?
6. Is GST registration required? Many Trusts / Funds do not require separate GST registration.
7. What GST and FBT concessions, rebates and exemptions should be noted on your endorsements and what does this mean for record keeping and reporting? GST and FBT endorsements differ for Funds and Institutions and TCCs and DGRs.
Tax Compliance Reviews
Increasingly we are being asked to conduct Tax Endorsement Reviews for Not for Profit bodies to mitigate the risk of loss of tax exemptions and concessions.
The ATO is active in reviewing and auditing the entitlement of Not for Profits to the tax concessions and endorsements they hold.
Public Fund Raising
Offices of Fair Trading in every State and Territory have additional licencing requirements for collecting donations from the public.
Stamp Duty exemptions
Exempt Institution registration by Offices of State Revenue is separate again.