Edited version of your private ruling

Authorisation Number: 1012259135816

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 fact 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. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.

Ruling:

Subject: Exemption from Income Tax from non profit association

Question:

Is the Association exempt from income tax under section 50-1 of the Income Tax Assessment Act 1997 (ITAA 1997) as a non-profit association established for the purpose of promoting the development of an Australian manufacturing resource under item 8.2(d) in section 50-40 of the ITAA 1997?

Answer:

Yes.

This ruling applies for the following period:

Year ended 30 June 2013

Year ended 30 June 2014

Year ended 30 June 2015

Year ended 30 June 2016

The scheme commences on:

1 July 2012

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

The Association was provided with five favourable rulings covering the years of income ended 30 June 2000 to 30 June 2012 that it is exempt from income tax pursuant to either paragraph 23(h) of the ITAA 1936 or item 8.2(d) in section 50-40 of ITAA 1997.

The previous private ruling issued to the Association in 2008 stated:

… [the Association]'s circumstances have not altered since the findings and decision made in the previous private ruling issued to [the Association] in 2005. The decision made in the previous ruling remains correct at law.

The Association has sought an extension to the previous ruling. The Association has stated that it considers that it continues to be exempt from income tax as its operations have not changed since the previous rulings. Specifically, the Association stated that it continues to satisfy the following criteria:

· It has been created with the sole intention of promoting the manufacturing resources of its members;

· Manufacturing operations of its members are predominantly carried out in Australia;

· Members are prohibited from receiving distributions of any profits of the Association; and

· Members are prohibited from receiving distributions of excess property upon dissolution of the Association.

Assumption:

This ruling is given on the basis that there are no material variation to the Association's circumstances and operation since the decisions made in the previous private rulings. Any material variation from these facts will mean that the ruling will have no effect.

Relevant legislative provisions:

Income Tax Assessment Act 1997 Section 50-1,

Income Tax Assessment Act 1997 Section 50-40 and

Income Tax Assessment Act 1936 Paragraph 23(h).

Reason for decision:

Assessable income of a taxpayer is exempt where the taxpayer falls within the description contained in section 50-1 and Item 8.2 of section 50-40 of the Income Tax Assessment Act 1997 (ITAA 1997):

'A society or association established for the purpose of promoting the development of any of the following Australian resources:

· Agricultural resources

· Horticultural resources

· Industrial resources

· manufacturing resources

· Pastoral resources

· Viticultural resources

· Aquaculture resources

· Fishing resources

...not carried on for the profit or gain of individual members.'

For an association to be exempt from taxation under this section it must be established predominantly for the purpose of promoting resource development. An essential element of the table in Item 8.2 above is that the section, in its application to production industries, applies only to Australian resources.

National Office Minute 96/3107-1: Resource Development Associations, dated 3 June 1997, (the Minute) provides guidelines on income tax exemption for non-profit organisations for promoting resource development, aviation and tourism. The Minute states the matters to be satisfied for tax exemption to apply:

· the organisation is a non-profit association;

· the dominant or principle purpose is promoting resource development;

· the resources are within the umbrella of resources specified in the paragraph;

· the resources, apart from aviation and tourism, are resources of Australia.

As stated in the information provided, there have been no material changes to the Association's operations and circumstance since the previous favourable rulings. Therefore, the decision made in the previous rulings that the Association is exempt from income tax as an association established for the purpose of promoting the development of manufacturing resources remains correct at law.

Specifically, as there are no material changes to the Association's operations, it continues to satisfy the criteria listed above where it:

· has an acceptable non-profit and dissolution clause in its constitution

· has a dominant purpose of promoting the development of Australian manufacturing resources, specifically the resources of its industry.

Accordingly, it is accepted that the Association is exempt from income tax pursuant to section 50-1 of the ITAA 1997 as a non-profit association established for the purpose of promoting manufacturing resources in Australia pursuant to item 8.2(d) in the table in section 50-40 of the ITAA 1997 for the period 1 July 2012 to 30 June 2016.