ASA has been conducting a number of meetings alongside both the ATO and ACNC to determine the best way forward for all the show societies who are not ACNC. We are still working closely with both bodies but at this time, we have the following information to provide to members.
We would like to provide an important update regarding the Australian Taxation Office’s (ATO) recent recommendations on Self Assessment for income tax exemption. Firstly, it’s crucial to reiterate that the ATO’s position on income tax exemption for eligible not-for-profits remains unchanged. The current laws governing entitlement to income tax exemption are still in effect. What has changed is the introduction of a new reporting requirement for organisations that self-assess under one of the eight categories specified by the ATO.
Eight Categories for Income Tax Exemption Self-Assessment
The ATO provides the following eight categories for self-assessment of income tax exemption:
Steps for Show Societies Not Registered with the ACNC
For those Show Societies that are not registered with the Australian Charities and Not-for-profits Commission (ACNC) and are only registered with the Department of Fair Trading, it is essential to first review your organisation’s primary purpose. This involves a thorough examination of your constituent documents, activities, use of funds, and historical operations.
The ATO specifically recommends that Agricultural Shows with an active Australian Business Number (ABN) but not registered with the ACNC will have an obligation to lodge the 2023-24 self-review return.
Lodging the 2023-24 Self-Review Return
To facilitate the process and allow sufficient time for registration with the ACNC, we recommend the following steps for lodging the 2023-24 self-review return:
- Select the ‘Community Service Organisation’ category.
- Answer ‘yes’ or ‘unsure’ to the question regarding whether your organisation has charitable purposes.
Upon lodging, you will receive a message stating: “The ATO may contact the organisation to provide guidance to help determine its charitable status.”
This approach will effectively place your organisation in a ‘quarantine’ status, allowing you to meet your self-review lodgement obligation while simultaneously being identified for further guidance from the ATO.
We encourage all members to take these steps promptly to ensure compliance with the ATO’s new reporting requirements. If you have any questions or need further assistance, please do not hesitate to reach out to each of your state bodies as they are involved in this process ensuring we can provide members with as much information and support as possible.
The ACNC has provided us with a resource document including links to a webinar on Charities & Not For Profits maintaining their income tax exemptions, self assessment tool, example clauses for constitutions and reporting obligations on a yearly basis . Read the ACNC resource here.