Clubs minutes, July 2011

5. An overview of the role of the ATO following key budget announcements for the sector, and recent ATO views on charities - Draft Ruling 2011/D2

Jason Aitchison presented on the role of the ATO following key budget announcements for the sector, and recent ATO views on charities. He addressed the role of the ACNC:

• to determine charitable status
• to provide education and support
• to run a one-stop-shop reporting framework and public information portal, and
• provide a seamless application/reporting process.

Some discussion and questions followed, including:

• Angie Hicks posed the question whether the ACNC will reject the status of an organisation that was endorsed by the ATO. Chris Leggett advised that it is likely that this will be a decision for the ACNC Commissioner.
• Chris Leggett further advised that all not-for-profits will have to register for their not-for-profit status via the ACNC eventually. Initially this will impact charities and will affect clubs and other not-for-profits years down the track.
• John McCallum understands that there is uncertainty about the applicability of the Word Investments decision to the clubs sector, and in this context questioned the cost/benefit of the current ATO audits being conducted and intended to be continued. Jason Aitchison advised that compliance activities will continue to be implemented as published in the ATO's Compliance Program.
• John McCallum explained that non-mutual income is mainly injected back into local sports, and that licensed sports clubs would be injecting far in excess of this income back into sport. John McCallum expressed the view that in this context he hoped the clubs industry was not being singled out for intense scrutiny. Mr Aitchison confirmed that this was not the case, and noted that the Compliance program 2011-12 has been published and covers a wide range of sectors.
• Chris Leggett advised that extra funding for a compliance program will be allocated once the charity definition is in place from 1 July 2013. He explained that the reporting requirements will vary for small not-for-profits to large not-for-profits. For example, small not-for-profits may be required to report in a simple 'post-card' method, while large not-for-profits will likely have to comply with Australian Accounting Standards Board reporting requirements.

Sections within Agenda items

• 1. Welcome, apologies and introductions
• 2. Endorsement of the minutes from the previous meeting 21 March 2011
• 3. Non-profit self governance tool
• 4. Non-profit reform
• 5. An overview of the role of the ATO following key budget announcements for the sector, and recent ATO views on charities - Draft Ruling 2011/D2
• 6. Better targeting of not-for-profit tax concessions - Treasury discussion paper
• 7. Recoupment of tax losses: How does the continuity test work for a corporation limited by guarantee with members?
• 8. PAYGW update
• 9. Around the traps