The Australia Taxation Office has released a Draft Ruling (TR2014/D5 Special Conditions for Various Entities whose Ordinary and Statutory Income is Exempt) for public comment.
This Draft Tax Ruling applies to entities which include registered charities, a classification under which many Australian Indigenous corporations have registered for tax exemption. These entities have been registered as tax exempt under Division 50 of the Income Tax Assessment Act 1997 and in doing so, had to comply with a number of conditions.
The Draft Tax Ruling deals with two of of those conditions, being:-
1. the entity must comply with all of the substantive requirements in its governing rules; and
2. the entity must apply all of its income and assets solely for the purpose for wehich the entity is established.
While the Draft Tax Ruling in part merely confirms our understanding of the legislation, it does clarify a number of matters, including how the Tax Office will view compliance should you be subject to a tax audit.
The first item that is illuminating is that the Draft Tax Ruling views the constitution or Rule Book as the main, but not the only source of "governing rules". It goes on to say that other sources of governing rules may be legislation....
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Is your Aboriginal organisation compliant in its charitable status?
Here's something that just happened to me, which I think is a branding opportunity gone amiss, and only somewhat recovered. I am doing home renovations and have to have 2 sensors of the home alarm disconnected, and booked a technician for today (the last day before work starts). I'm waiting and no technician arrives, so I phone the alarm company. I explain the situation.
