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Edited version of private advice
Authorisation Number: 1052359649657
Date of advice: 12 February 2025
Ruling
Subject: Income Tax Exempt Entity
Question 1
Is the Company exempt from income tax under section 50-1 of the Income Tax Assessment Act 1997 (ITAA 1997) as an association established for the purpose of promoting the development of Australian industrial and manufacturing resources pursuant to item 8.2(c) and item 8.2(d) respectively of the table in section 50-40 of the ITAA 1997?
Answer 1
Yes.
Your ordinary and statutory income is exempt from income tax under section 50-1 of the ITAA 1997 on the basis that you were established for the purpose of promoting the development of Australian industrial and manufacturing resources under item 8.2(c) and item 8.2(d) respectively of the table in section 50-40 of the ITAA 1997, your activities are not carried on for the profit or gain of your individual members as outlined in your Constitution, and you are not a charity.
This ruling applies for the following periods:
Year ending 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commenced on:
XX Month 20XX
Relevant facts and circumstances
The Company was incorporated in 20XX and is a not-for-profit company limited by guarantee.
The Company is a not-for profit organisation.
The Company is not registered with the Australian Charities and Not-for-profits Commission (ACNC) as a charity.
The Company conducts its main activities in Australia.
The Company's Constitution (the Constitution) was adopted in 20XX and updated in 20XX, and outlines the Company objectives, which aligns with the requirements of section 50-40 of the ITAA 1997.
The Constitution confirms the entity is not-for-profit andmust not distribute any income or assets directly or indirectly to its members as members.
The application of winding-up clause of the Constitution further details and confirms the Company status as not-for-profit:
Application of surplus assets in winding-up
If upon the winding up or dissolution of the Company, there remains, after the satisfaction of all its debts and liabilities, any property whatsoever, the same shall not be paid to or distributed among the Members of the Company, but shall be given or transferred to some other institution or institutions having objectives similar to the objectives of the Company, such institution or institutions to be determined by the Members of the Company at or before the time of dissolution, and if and so far as effect cannot be given to the aforesaid provision, then to some charitable object.
The Company submitted a copy of the Constitution to support the application.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 50-1
Income Tax Assessment Act 1997 section 50-40
Income Tax Assessment Act 1997 section 50-40 item 8.2(c)
Income Tax Assessment Act 1997 section 50-40 item 8.2(d)
Income Tax Assessment Act 1997 section 50-47
Income Tax Assessment Act 1997 section 995-1
Australian Charities and Non-for-profits Commission Act 2012 section 25-5
Charities Act 2013 section 12