Non-Profit News Service No. 0291 - Compliance Program 2010-11 released
Non-Profit News Service No. 0291 - Compliance Program 2010-11 released
On Thursday 8 July 2010, Tax Commissioner Michael D'Ascenzo released the Compliance program 2010-11.
The ATO publishes a compliance program each year. This is our way of telling people about our priorities for the current year and what we are doing to address tax compliance risks of concern to us.
The compliance program contains a non-profit organisations chapter that discusses our general approach and specific compliance issues.
The following is a summary of some of the key priorities and activities for the non-profit market segment.
Our general approach
- Educate the community on obligations and entitlements to concessions by offering a range of publications, advisory and electronic services including a free email update service and dedicated website.
- Ensure non profit organisations comply with their obligations.
- Focus on those engaging in deliberate misuse of tax concessions.
Initiatives and innovations
We have updated market value guidelines to assist charitable institutions and gift-deductible entities to decide if a supply is made for nominal consideration and is GST-free.
The Tax concession charities - frequently asked questions webpage answers questions about tax concessions, charities and endorsement requirements.
Two new guides - Mutuality and taxable income and Guide to company tax return for non-profit organisations 2010 are available to help taxable non-profit clubs, societies and associations understand the principle of mutuality, calculate their taxable income and complete the company tax return.
Promoting good governance and tax risk management
The need for a good governance framework is central to supporting community confidence. Having good governance practices helps organisations identify risks to their reputation and tax compliance. Non-profit organisations should regularly monitor their activities and decide if their purpose remains consistent with the legal requirements.
We will contact a sample of organisations to review their governance processes. We will also consult with the sector about tools or products that will help support their governance approach.
Misclassification of supplies made for nominal considerations
Some charitable institutions and gift-deductible entities are applying the incorrect GST treatment to supplies made for nominal consideration.
We will provide a range of help and education products to assist organisations to correctly classify supplies made for nominal consideration.
Tax compliance for clubs
This year we will be undertaking reviews of clubs that did not take up the offer to self-correct past errors in the calculation of mutual income, particularly income from Club Keno, and the non-lodgement of income tax returns.
We will work with external stakeholders to provide a range of assistance products to help clubs identify, classify and record transactions to lodge correct activity statements.
Word Investments Limited
The High Court found a commercial business with exclusively charitable objects that directed its profits to charities was eligible for endorsement as a charitable institution.
We will monitor the sector to identify whether organisations are modifying their structure or activities to take advantage of this decision.
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Last Modified: Tuesday, 27 July 2010
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