| Disclaimer This edited version has been archived due to the length of time since original publication.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 private ruling
Authorisation Number: 1011759243812
This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fac sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.
Ruling
Subject : Income tax exemption
If the Club generates income from selling advertising space in their newsletter, can they self assess their income tax exempt status?
Answer
Yes
Facts
The Club operates as a non-profit organisation.
The Club self-assesses its income tax exemption.
The Club publishes a newsletter which is provided to members.
The Club intends to sell advertising space in the newsletter to interested organisations.
Any income made from the sale of advertising space in the newsletter will be used for the activities of the Club.
Reasons for decision
This private binding ruling does not determine whether the Club is a non-profit organisation or income tax exempt.
Division 50 of the Income Tax Assessment Act 1997 lists various categories of exempt entity whose ordinary and statutory income is exempt from income tax. The Club has assessed that it is an exempt entity, as a club established for community service purposes. Such a club can not be carried on for profit or gain of individual members.
The ATO accepts an organisation as non-profit where its constituent or governing documents prevent it from distributing profits or assets for the benefit of particular people - both while it is operating and when it winds up.
A non-profit organisation can make a profit, however any profit made must go back into the operation of the organisation to carry out its purposes and must not be distributed to any of its members.
If the Club's constitution prevents it from distributing assets and income to members, and the Club acts in accordance with that prohibition, the derivation of income from selling advertising space in the newsletter would not impact on the non-profit nature of the Club.
The Club could continue to self assess its income tax exemption.