Australian Taxation Office (ATO)

The ATO has recently refreshed its compliance and strategic plans and here is our pick of the highlights.

On the current ATO Watch list are:

  • Public and Private Ancillary Funds – annual scrutiny of finances and compliance with Guideline requirements.
  • Refund of Franking Credits – review of amounts claimed (doubled in the last 5 years).
  • Clubs – is the principle of mutuality being correctly applied.
  • Self-assessing entities such as sporting clubs – FBT benefits and GST registration.
  • Animal welfare and school building funds – watching for private benefit replacing mandated purposes of these organisations.
  • Deductible Gift Recipients – mission drift from mandated purposes that takes them outside the DGR criteria.
  • Terrorism Financing and Money Laundering – scrutiny of overseas activities and transactions continues to be a priority.
  • Closing Up Shop – making sure that any surplus assets go to the purposes mandated in the constitutional provisions for winding up.

Coming soon

  • The 2021 Budget announced that from 1 July 2023 those non-profits that self-assess their concessional status (community service organisation, sporting organisations and cultural organisations that are not charities) will be required to lodge an annual self-review return. This is in response to Recommendation 24 of the ACNC Legislative Review 2018.
  • Treasury Laws Amendment (2021 Measures No.2) Act 2021 requires all 47 of 49 general DGR categories to register with the ACNC as charities. The amendment comes into force on 14 December 2021, but there is a 12 month transitional period with scope to extend this to 3 years with ATO approval. This will affect less than 2,000 DGRs mainly being school building funds, cultural organisations, environmental organisations and necessitous persons funds.
  • Taxation Ruling TR2021/D6 – Income Tax the games and sports exemption is being proposed to replace the existing ruling in 2022.
  • GSTR 2012/2 Goods and Service Tax: financial assistance payments will be revised.
  • Public Ancillary Fund Guidelines are being reconsidered.
  • TR 95/27 Public Funds is being reviewed.
  • TR 2000/10 Public Libraries, Museums and Art Galleries is being reviewed to reflect contemporary operation of these institutions.

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