Australian Charities and Not-for-profits Commission (ACNC) - Budget Announcment

Zhent

Leakus Maximus
Not sure if this is the most appropriate subforum, but this is worth noting. Mods can move or merge with a similar thread if appropriate.

So anyway, as any Australian should know the Federal Budget was announced this evening, and of course it contains some details of the Not-for-Profit sector reform - specifically the establishment of the Australian Charities and Not-for-profits Commission (ACNC)! :happydance:

Here are the relevant excerpts from the budget documents. Dox from here: http://www.budget.gov.au/2011-12/index.htm

Not-for-profit sector reforms — Australian Charities and Not-for-profits
Commission — establishment

The Government will provide $53.6 million over four years for the establishment of a
new independent statutory agency, the Australian Charities and Not-for-profits
Commission (ACNC), by 1 July 2012 and related structural changes required to the
Australian Taxation Office (ATO).

An implementation taskforce (headed by the expected Commissioner of the ACNC)
will also be set up in Treasury from 1 July 2011 to ensure the ACNC is ready for
operation by 1 July 2012.

The Commissioner of the ACNC will be appointed by the Government and report to
Parliament through the Assistant Treasurer. The Commissioner will have sole
responsibility for determining charitable, public benevolent institution, and other
not-for-profit status for all Commonwealth purposes. The ACNC will also initially be
responsible for providing education and support to the sector; implementing a
‘report-once use-often’ general reporting framework for charities; and implementing a
public information portal by 1 July 2013.

From 1 July 2011, the ATO will structurally separate its role of determining charitable
status from its role of administering tax concessions, in preparation for the
establishment of the ACNC. The Commissioner of Taxation will retain responsibility
for administering tax concessions for the not-for-profit sector.

The ATO will provide corporate service support to the ACNC in the form of
information technology services, human services, financial services and other related
functions.

The Government will also undertake negotiations with the States and Territories on
national regulation and a new national regulator for the sector, with the aim of
minimising reporting and other regulatory requirements through coordinated national
arrangements.

The measure is expected to result in additional tax revenue of $41.0 million over
four years as a result of increased compliance activity to ensure that not-for-profit tax
concessions are used only as intended.

This reform progresses another recommendation of the Australia’s Future Tax System
Review, and continues the process of tax reform started in May last year with the
release of the Government’s Stronger, Fairer, Simpler package of reforms.
See also the related revenue measures titled Not-for-profit sector reforms — better
targeting of not-for-profit tax concessions and Not-for-profit sector reforms — introducing a
statutory definition of ‘charity’.

Not-for-profit sector reforms — better targeting of not-for-profit tax concessions

The Government will reform the tax concessions provided to not-for-profit (NFP)
entities to ensure they are targeted only at those activities that directly further a NFP’s
altruistic purposes. The new arrangements will commence on 1 July 2011 and will
initially affect only new unrelated commercial activities that commence after
10 May 2011.

Under this measure, the NFP income tax concessions will only apply to profits
generated by unrelated commercial activities that are directed back to a NFP entity to
carry out its altruistic work. This means NFP entities will pay income tax on profits
from their unrelated commercial activities that are not directed back to their altruistic
purpose (that is, the earnings they retain in their commercial undertaking).

NFP entities, in respect of their unrelated commercial activities, will also not have
access to the fringe benefits tax exemptions or rebate, goods and services tax
concessions, or deductible gift recipient support in relation to those activities.

Commercial activities that further a NFP entity’s altruistic purposes, and small-scale
and low-risk unrelated commercial activities, will not be affected by the reforms.
NFP entities with existing unrelated commercial activities will initially be able to
continue to use their tax concessions to support these activities. The Government will
consult on transitional arrangements for these existing activities, with the intention of
phasing these out over time.

NFP entities that have entered into a government service delivery contract as at
10 May 2011 will be allowed to use their tax concessions in support of that contract.
Likewise, the 50,000 National Rental Affordability Scheme allocations will be
unaffected by the tax changes.

See also the related expense measure titled Not-for-profit sector reforms — Australian
Charities and Not-for-profits Commision — establishment, and the related revenue measure
titled Not-for-profit sector reforms — introducing a statutory definition of ‘charity’.

Not-for-profit sector reforms — introducing a statutory definition of 'charity'

The Government will consult on and introduce a statutory definition of ‘charity’ for all
Commonwealth laws to take effect from 1 July 2013. It will be based on the 2001 Report
of the Inquiry into the Definition of Charities and Related Organisations, taking account of
the findings of recent judicial decisions, such as Aid/Watch Incorporated v Commissioner
of Taxation. This measure is not expected to have an impact on revenue.

The Government will also consult with the states and territories with the intention of
developing and introducing a definition of ‘charity’ that can be adopted by all
jurisdictions. The adoption of a consistent definition across all jurisdictions would
considerably assist the sector.

The Government will provide the proposed Australian Charities and Not-for-profits
Commission with $2.9 million over four years to develop new guidance for the sector,
implement system changes, and re-assess the charitable status of entities on the basis
of the new statutory definition.

This measure is part of the Government’s commitment to Not-for-profit sector reforms,
which aim to deliver smarter regulation, reduce red tape and improve transparency
and accountability of the sector.

This reform progresses another recommendation of the Australia’s Future Tax System
Review, and continues the process of tax reform started in May last year with the
release of the Government’s Stronger, Fairer, Simpler package of reforms.

See also the related expense measure titled Not-for-profit sector reforms — Australian
Charities and Not-for-profits Commission — establishment, and the related revenue
measure titled Not-for-profit sector reforms — better targeting of not-for-profit tax
concessions.

I can't replicate the attached tables with numbers, check the documents for those. (above came out of Paper 2)
 

Jump

Operating teatime
Under the existing rules, 'religions' have a different standing to 'charities'. Religions can self-declare their religious status and not file returns. (Charities have to seek permission for their exemption.) I hope this changes.

---------- Post added at 10:21 PM ---------- Previous post was at 10:17 PM ----------

I can see a bunch of court cases coming on .... :eyeroll:

I think we'll find the verdicts have to be in compliance with the new laws, regulations and statutes. There has been a lot of thought and consultation put into this :thumbsup:
 

Purple Rain

Crusader
Maybe I should read the stuff first, but what bothers me is what happens if the cult fair games or otherwise attempts to influence the commissioner. I mean they've done it with US Supreme Court judges and they've done it with the IRS. I hope the system is transparent enough to be pretty much dirty-trick-proof.
 
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