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Edited version of private advice
Authorisation Number: 1051817020960
Date of advice: 17 March 2021
Ruling
Subject: Income tax exemption
Question
Is the ordinary and statutory income of the Association exempt from income tax under section 50-1 of the Income Tax Assessment Act 1997 (ITAA 1997) because it is established for the purpose of promoting the development of an Australian resource pursuant to Item 8.2 in section 50-40 of the ITAA 1997?
Answer
Yes
This ruling applies for the following periods:
Year ended 30 June 20XB
Year ended 30 June 20XC
Year ended 30 June 20XD
Year ended 30 June 20XE
The scheme commences on:
1 July 20XA
Relevant facts and circumstances
The Association has applied for a private ruling that it continues to be exempt from income tax under section 50-1 of the ITAA 1997 as an association established for the purpose of promoting the development of an Australian resource pursuant to Item 8.2 in section 50-40 of the ITAA 1997.
The Association has previously received favourable rulings on this matter.
The Association rules have not altered since the last private ruling. The Association has also not changed its activities as discussed with the applicant.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 50-1
Income Tax Assessment Act 1997 Section 50-40
Reasons for decision
Assessable income of a taxpayer is exempt under section 50-1 of the ITAA 1997 where the taxpayer falls within the description contained in Item 8.2 of section 50-40 of the ITAA 1997:
A society or association established for the purpose of promoting the development of any of the following Australian resources:
(a) agricultural resources
(b) horticultural resources
(c) industrial resources
(d) manufacturing resources
(e) pastoral resources
(f) viticultural resources
(g) aquacultural resources
(h) fishing resources
The exemption is subject to a special condition that the society or association is not carried on for the profit or gain of individual members.
The matters to be satisfied before exemption under section 50-40 of the ITAA 1997 applies are:
• the organisation is a non-profit association or society; and
• the dominant or principal purpose for which the organisation is established is promoting resource development; and
• the resources whose development is being promoted are within the umbrella of resources specified in the relevant section; and
• the resources, are resources of Australia.
If the Association fails to satisfy these requirements, it will not be exempt from income tax under section 50-40 of the ITAA 1997.
The rules and activities of the Association have not changed since the last private ruling.
The Association continues to satisfy the requirements of an association that promotes the development of any of the resources of Australia. Its income is exempt pursuant to sections 50-1 and 50-40 of the ITAA 1997.
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