• Categories of revenue and expenses

    As a result of the mutuality principle, revenue and expenses fall within one of three categories for tax purposes.

    Category

    Revenue

    Expenses

    1

    Non-assessable

    • Revenue from mutual dealings with members (for example, membership subscriptions).
    • Revenue that the tax law classifies as not assessable (for example, donations received).

     

    Non-deductible

    • Expenses relating to members (for example, the cost of membership badges).
    • Expenses that the tax law specifies as non-deductible (for example, fines and penalties imposed by an Australian law).

     

    2

    Assessable

    • Revenue from trading activities relating to non-members (for example, fees from hiring function rooms to the public).
    • Revenue from sources outside the organisation (for example, bank interest received).
    • Revenue that the tax law specifies as assessable (for example, payments received to fulfil a lease obligation to repair).

     

    Deductible

    • Expenses relating to non-members (for example, the cost of running a function solely for non-members).
    • Expenses relating to fully assessable income (for example, fees for earning bank interest).
    • Expenses that the tax law allows without apportionment (for example, contributions to staff superannuation).

     

    3

    Apportionable

    Revenue from trading activities relating to members and non-members (for example, bar sales).

    Apportionable

    Expenses of trading activities relating to members and non-members (for example, bar expenses).

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      Last modified: 23 Jun 2016QC 23099