AndrewLamTaxSpecialist:Not-For-ProfitSector

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TaxConcessions

• Taxisacostthaterodesprofits

• ANOT-for-profitsneedstomakeaprofit

• Weneedtomakeaprofit sothatwecanpursueourobjectives

• Weneedtomakeaprofit sowecanhirethebestpeople

• Weneedtomakeaprofit sowecancreateainspiring workingenvironment

• Weneedtomakeaprofitbecause…………… ………….

Whydowecare?

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Not-for-profitTaxation

• Incometaxexemptions• GSTconcessions• FBTconcessions(rebateorexempt)• DGR(not strictlyataxconcession)• Principleofmutuality(not strictlyataxconcession)• Payrolltaxconcessions• Stampdutyconcessions• Landtax• Localgovernment concessions(e.g.rates)

RecapoftaxconcessionforNFPs

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Not-for-profitTaxation

• Accesstoconcessionsarenotautomatic• Someexemptions requireself-assessmentandothers requireendorsementbythe

ACNCand/orATO• Regularlyreviewaccesstotaxconcessions• Undertakeataxhealthcheck.(Therearemanyconcessionsbeingforgone)

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Keypoints:

IsYourOrganisationCharitable?

• Advancinghealth• Advancingeducation• Advancingsocialorpublicwelfare• Advancing religion• Advancingculture• Promoting reconciliation,mutual

respectandtolerancebetweengroupsof individuals thatareinAustralia

• Promoting orprotectinghumanrights

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TheCharitiesAct2013(Cth)liststwelvecharitablepurposes:

• Advancing thesecurityorsafetyofAustraliaortheAustralianpublic

• Preventingorrelievingthesufferingofanimals

• Advancing thenaturalenvironment• Promoting oropposing achangetoany

matterestablishedbylaw,policyorpracticeintheCommonwealth, astate,aterritoryoranothercountry,(wherethatchangefurthersoropposesoneormoreofthepurposesabove)

• Othersimilarpurposes ‘beneficialtothegeneralpublic’ (ageneralcategory)

Responsibilities,RisksandOpportunities?

• Incometaxstatusshould beannuallyreviewedorwhenstructureoractivitieschange(non-charitiesandcharities)

• Don’t forget refundoffrankingcredits• ACNCreporting e.g.Annual

Information Statements• Whattodoifyourorganisation is

pickedforanATOreview?

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What’sNew?

• FBTexemptCaps($31,177or$17,667)31March2017

• FBTexemptCaps($30,000or$17,000)31March2018(consideradjustingsalarypackages)

• FBTrebateof49%cappedat$31,17731March2017

• FBTrebateof47%cappedat$30,00031March2018

• Salarypackagedmealentertainmentandentertainment facilityleasingexpensebenefitscappedat$5,000

FringeBenefitTax

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Not-for-profitStewardshipGroup

• Lastavailableminutes– 13July2016.• Lastmeeting– 8March2017.

• Majortopicscovered:• CompliancecostofFBTreporting (Q23)• ImpactofCommonReportingStandards• ATO’scomplianceapproachforbreachesoftheAncillaryFundGuidelines• UpdatingtheAncillaryFundmodel trustdeed• ATOProject– building confidence inthetaxandsupersystemforNFPs(moreon

nextslide)

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BuildingConfidenceintheTaxandSuperSystemforNFPs

• HowtheATOdetectsanddealswithorganisationsthatdon’tdotherightthing

• Whatattractsattention?

• Privateancillaryfunds- Latelodgementofannualreturns,Relatedpartytransactions

• CharitiesandDGRs– Notapplyingincomeandassetssolelyforpurpose,incorrectclaimsforfrankingcreditrefunds,incorrectlyadvertisingthatdeductibledonationscanbereceived.

• Self-assessingincometaxexemptnot-for-profits– incorrectselfassessing,notmeetingtherequirements

• FBT– incorrectlyclaimingrebatesandexemptions

• Mutuality– incorrectlyclassifyingmemberandnon-memberincomeandexpenses

ComplianceapproachforNFPs

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WhatResourcesarethere?Incometax• Incometaxguide fornon-profit organisations:

http://law.ato.gov.au/atolaw/view.htm?DocID=SAV/ITGNPO/00001• Incometaxstatusof self-assessorsshouldberegularly reviewed(non-charities):

https://www.ato.gov.au/assets/0/104/1909/2003/bba2a60f-db06-4d61-9fef-ec6ea0f0cea2.pdf

• Incometaxstatusofcharitiesshouldberegularlyreviewed(charities:https://www.ato.gov.au/assets/0/104/1909/2003/51a4ab21-5668-4211-bde1-e1212bc7f65a.pdf

GST• https://www.ato.gov.au/Non-profit/Your-organisation/GST/GST-concessions/

FBTguideforemployers• https://www.ato.gov.au/general/fringe-benefits-tax-%28fbt%29/in-

detail/employers-guide/fbt---a-guide-for-employers/?page=1#Introduction

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Aboutme– AndrewLam

• Isacharteredtaxadviserandasolicitor• Hasworkedwithin leadingtaxationadvisory teamsinchartered

accounting firms(bothbig4andmid-tier)andatop-tierlawfirm• Hasdeepexperienceintaxationadvisorymatterswithaparticularfocusandinterest

inNFPswiththeirtaxationaffairs• Alsoprovides taxadviceinconnectionwithbusinesspurchaseandsalestransactions,

undertaking taxduediligenceassignments, structuring inbound andoutboundinvestmentsandgeneraltaxplanning.

• BachelorofCommerce/BachelorofLaws,MasterofLaws(Taxation)• ACharteredTaxAdvisor• Andrew.lam@hillrogers.com.au │m:0419293385

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t+61292325111f+61292337950www.hillrogers.com.au| info@hillrogers.com.au

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