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Edited version of private advice
Authorisation Number: 1052360052748
Date of advice: 13 February 2025
Ruling
Subject: Income tax exempt entity
Question
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 agricultural resources pursuant to item 8.2(a) of the table in section 50-40 of the ITAA 1997?
Answer
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 agricultural resources under item 8.2(a) 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
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 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 property on winding-up
If when the Company is wound up a surplus of assets remains after all debts or liabilities of the Company have been paid, the surplus must be distributed to one or more corporations, funds, authorities or institutions:
(a) having similar aims and basic objects to the Company; and
(b) which when the distribution is to be made prohibits by its constitution or other constituent document the payment or transfer directly or indirectly any of its income and property to any member.
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(a)
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