Editor; The following are taken from various ATO updates directed towards not-for-profits
Have you checked your endorsement and tax status?
According to the ATO, not-for-profit (NFP) organisations should review their income tax status on a regular basis, and they recommend this be reviewed:
- Once a year; or
- When there is a major change to the organisations structure or activities
The following online resources can help with conducting a review of an organization:
- Sporting organisations can use the worksheet in the ATO’s guide ‘income tax exemption and sporting club’s and
- Other not-for-profit organisations can use the worksheet ‘income tax status review worksheet for self-assessing non-profit organisations.
Charities have a different review process to organisations that can self-assess their income tax status, and should refer to ‘Review your TCC endorsement’
Reviewing a DGR endorsement
The ATO also recommends that NRPs with deductible gift recipient (DGR) status review their organisations to make sure it’s still operating for the purposes for which it was granted DGR endorsement, and the ATO has worksheets available on their website to assist NFPs for this purpose
Anyone with questions about these issues can also phone the ATO’s NFP information line on 1300 130 248 from 8am to 6pm, Monday to Friday
Tax concessions changes and NFPs
The ATO has reminded NFPs that, from 1 July 2016, the small business turnover threshold is $10 million (previously $2 million) meaning that NFPS falling under that threshold have access to a range of small business concessions.
NFPs might be especially interested in the following small business FBT concessions applicable from 1 April 2017.
- FBT work-related devices exemption (when providing employees multiple work-related portable electronic devices that have substantially identical functions) and;
- FBT car parking exemptions
Also, NFPs not exempt from income tax, such as clubs, societies and associations: may benefit from the following concessions:
- 5% small business company tax rate for the 2016/17 income year; and
- $20,000 instant asset write-off (which allows the taxpayer to immediately deduct the business portion of most assets that cost less than $20,000 each until 30 June 2018)
How the Common Reporting Standard affects NRP’s Some NFP Organisations will be affected the Common Reporting Standard (CRS)
Under the CRS, many entities – including some NFP organisations – will be required to collect and report to the ATO financial account information on non-residents, and the ATO will exchange this information with the participating tax authorities of those non-residents.
The ATO will also receive financial account information on Australian residents from other countries’ tax authorities.
NFPS could fall within a category required to report under the CRS if a significant proportion of their income Is derived from investments.
The implementation of the CRS commenced in Australia on 1 July 2017
The ATO has released tailored advice to help those in the NFP sector understand if they have obligations under the CRS