The Australian Tax Office (ATO) has released a new guide, Income tax exemption and sporting clubs. The guide is for office bearers and advisers of non-profit clubs to use when self-assessing if they are exempt from income tax as a society, association or club established for the encouragement of a game or sport.
The guide is available from our website only. Organisations can download a printable version of the guide in Portable Document Format (PDF).
You can use the guide to determine if your society, association or club is established for the encouragement of a game or sport. The guide includes summaries of three Federal Court cases and three Administrative Appeal Tribunal decisions to help clubs that conduct extensive non-sporting activities (in addition to their sporting activities) determine their income tax status.
Where you are satisfied that your club is exempt from income tax, you do not need to seek approval from us. Clubs are reminded that income tax exemption is not necessarily permanent. The growth of a club and changes in its constitution, focus and activities can alter the character of the club.
Therefore, it is important that clubs review their status as part of their governance processes to ensure they continue to meet the requirements for exemption. A worksheet is included in the guide for you to use in your initial and ongoing assessments of the club's tax status. If you are still unsure about your club's status after completing the worksheet, you can phone us on 1300 130 248 for advice.
If you become aware that you have incorrectly assessed your club as income tax exempt, you must contact us immediately.
If a club does not meet the requirements for exemption, it is not exempt from income tax. However, not all money or property the club receives will be assessable income due to the 'mutuality principle'. Broadly, this means that mutual dealings with members, such as member subscriptions, are not assessable income. Refer to our guide Mutuality and taxable income for more information about mutual dealings and the calculation of taxable income for taxable clubs.
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Last Modified: Tuesday, 22 February 2011