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Edited version of your written advice
Authorisation Number: 1051339803921
Date of advice: 21 February 2018
Ruling
Subject: Income Tax Exemption – Promotion of Australian Manufacturing Resources
Question 1
Is the Entity exempt from income tax pursuant to section 50-1 of the Income Tax Assessment Act 1997 (ITAA 1997) as a non-profit society or organisation established for the purpose of promoting the development of Australian manufacturing resources under item 8.2(d) of section 50-40?
Answer
Yes
This ruling applies for the following periods:
Year ended 30 June 2017
Year ended 30 June 2018
Year ended 30 June 2019
Year ended 30 June 2020
The scheme commences on:
1 July 2016
Relevant facts and circumstances
The Entity has applied for a private ruling that 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 Australian manufacturing resources under item 8.2(d) in section 50-40 of the ITAA 1997.
The Entity has previously received favourable ruling in this matter.
The Entity has not changed its Constitution or activities since the last private ruling.
The Entity is the peak industry body for manufactured goods.
The Entity promotes the development of manufactured goods and the interests of the manufacturers, retailers and associated businesses through a variety of activities, including the sharing of technical advice, and representing the interests of Australian manufacturers competing with inferior imported products.
The main objects of the Entity are:
● to foster and assist the development of the manufactured goods industries; and
● to act in the efforts in promoting or advancing in any way the manufactured goods industries, to represent and express the views on the manufactured goods industries.
The Entity’s Constitution has an appropriate non-profit clause and winding up clause.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 50-1 and
Income Tax Assessment Act 1997 Section 50-40
Reasons for decision
Where an entity falls within the description contained in item 8.2 of section 50-40 of the ITAA 1997 its ordinary an statutory income is exempt from income tax under section 50-1 of the ITAA 1997.
Item 8.2 in the table in section 50-40 of the ITAA 1997 states:
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 organisation is not carried on for the profit or gain of its individual members.
The matters to be satisfied under item 8.2 in the table in section 50-40 of the ITAA 1997 are:
● the organisation is a non-profit association or society
● the dominant or principal purpose for which the organisation is established is promoting resource development
● the resources whose development is being promoted are within the umbrella of resources specified in the relevant section
● the resources, are resources of Australia.
If the society or organisation fails to satisfy all these requirements, it will not be exempt from income tax under section 50-1 of the ITAA 1997 as a non-profit society or organisation established for the purpose of promoting the development of Australian manufacturing resources under item 8.2(d) of section 50-40 of the ITAA 1997.
The rules and activities of the Entity have not changed the since the last private ruling. The Entity’s constitution and activities reflect that it was established for the dominant purpose of promoting the development of Australian manufacturing resources and that it is not carried on for the profit or gain of its individual members.
The Entity continues to satisfy the requirements of an association that promotes the development of a manufacturing resource of Australia. Its income is exempt pursuant to section 50-1 and 50-40 of the ITAA 1997.