Disclaimer
This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your private ruling

Authorisation Number: 1012511044632

Ruling

Subject: Income Tax Exemption ~ Resource Development

Question 1

Is the Association exempt from income tax pursuant to section 50-1 of the Income Tax Assessment Act 1997 (ITAA 1997) on the basis that it is a resource development organisation as described in item 8.3 of section 50-40 of the ITAA 1997?

Answer

No

This ruling applies for the following periods:

Period ended 30 June 2010

Period ended 30 June 2011

Period ended 30 June 2012

Period ended 30 June 2013

Relevant facts and circumstances

The Association is a not-for-profit organisation that represents the community to foster growth and assist in policy discussions at various levels on information and communication technology.

The Association provides services to its members only.

The Association does not provide any services to non-members.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 50-1

Income Tax Assessment Act 1997 section 50-40

Reasons for decision

Issue 1

Question 1

Summary

The Association is not exempt from income tax pursuant to section 50-1 of the Income Tax Assessment Act 1997 (ITAA 1997) as it has failed to satisfy all the requirements of item 8.3 of in the table in section 50-40 of the ITAA 1997.

Detailed reasoning

Section 50-1 of the ITAA 1997 provides that the ordinary and statutory income of the entities described in the tables which follow that section are exempt from income tax.

Included in those tables is item 8.3 in the table in section 50-40 of the ITAA 1997.It refers to a society or association established to promote the development of information and communications technology resources in Australia.

The special condition imposed on the society or association by section 50-40 of the ITAA 1997 for the exemption to apply is that it is not carried on for the profit or gain of its individual members.

Accordingly to ascertain an organisation's income tax status under item 8.3 of the table in section 50-40 of the ITAA 1997 it is necessary to determine whether:

If the association fails to satisfy these requirements, its income will not be exempt under this provision.

In this instance the Association does not meet the above requirements under item 8.3 of section 50-40 of the ITAA 1997 as it has failed to benefit the broader community and is therefore not exempt from income tax pursuant to section 50-1 of the ITAA 1997.

Given the above situation, the tax liability of the Association cannot be amended as it is not considered to be a non-profit association which meets the requirements of item 8.3 of the table in section 50-40 of the ITAA 1997.

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).