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  • Straight from the source – August 2021

    Olympic Gold!

    If you’re like most people in Australia, you have been glued to the television watching our swimmers go from strength to strength, creating history! But we have had successes across the board. At the time of writing, our medal tally is 14 gold, 4 silver and 15 bronze. What an enviable effort at a point in history when hope and working together is at its most critical.

    I was also interested in noting how many different sports have been registered for the Olympics. While the inaugural Athens 1896 Games involved only nine sports and 43 events, Tokyo 2020 features 33 sports and 339 medal events, making it the biggest Olympic program to date. Who had even heard of sport climbing before the Olympics or thought that skateboarding would be an Olympic sport?

    This got me thinking about the role of not-for-profits in Olympic Games. The International Olympic Committee (IOC) is a non-profit organisation dedicated to using the profit generated from the Olympic Games to assist athletes and develop sport world-wide. In fact, 90% of their funds go to directly supporting athletes and the games while 10% goes to IOC operations.

    I was also pleased to see that a quick google search revealed that the IOC demonstrates all the hallmarks expected of a not-for-profit organisation by ensuring:

    • IOC distributions are strictly monitored
    • compliance and good governance are in place
    • IFRS Financial Statements are published annually, and
    • they are externally audited.

    Over the last few years, we have been reviewing our public advice and guidance for not-for-profits operating in Australia. Most recently we have been working with the NFP Stewardship Group members to refresh the ATO’s taxation ruling TR 97/22 Income tax: exempt sporting clubs.

    TR 97/22 sets out the ATO view on when not-for-profit societies, associations or clubs are established for the ‘encouragement of a game or sport’; and are therefore income tax exempt.

    We have not changed our view on the application of the income tax exemption for games and sporting clubs. However, the circumstances in which the games and sports exemption applies to a society, association or club have been updated in the draft ruling to reflect a contemporary setting and important case law decided after TR 97/22 was originally published.

    We expect to publish the refreshed ruling in the coming weeks, so keep an eye out.

    Like all not-for-profits, we expect sporting clubs to self-review their entitlement to the income tax exemption each year as part of good governance. Self-review is also recommended when there is a major change in the structure or activities of a club.

    From 1 July 2023, all self-assessing income exempt not-for-profits with an active Australian business number (ABN) will be required to complete an annual online self-review form which they will need to lodge with the ATO. In preparation, it is good practice to review your entitlement to the income tax exemption and call us if you think you’ve got it wrong. Phone our dedicated Not-for-profit Premium Advice Service on 1300 130 248 between 8.00am and 6.00pm, Monday to Friday.

    There are eleven years and two Olympic Games between now and 2032 when Brisbane becomes the host nation. This will mark the third time Australia has hosted this world-wide event.

    In the spirit of competitiveness and showcasing all that is beautiful in Australia, I am confident that we will excel not only as a host nation but as citizens of the world. While most of us will not make it to compete at the Olympic games, it is good to know that as taxpaying citizens we all contribute in some small way to the encouragement of sport in Australia and this is what places us on the world stage.

    Go Aussies!

    Last modified: 04 Aug 2021QC 66527