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How to manage governance and compliance with the new NFP regime. Anne Robinson Solicitor Director Prolegis Lawyers, Sydney. Outline. Introduction Reform Timeline ACNC role and impact Governance Standards Definition of Charity Tax Concession Charity (TCC) Deductible Gift Recipient (DGR)

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How to manage governance and compliance with the new nfp regime
How to manage governance and compliance with the new NFP regime

Anne Robinson

Solicitor DirectorProlegis Lawyers, Sydney


Outline
Outline regime

Introduction

Reform Timeline

ACNC role and impact

Governance Standards

Definition of Charity

Tax Concession Charity (TCC)

Deductible Gift Recipient (DGR)

Compliance …


Introduction
Introduction regime

The whole landscape for charities/NFPs is changing. What are the implications for you:

  • governance

  • compliance



Reform regimeTimeline

Changes already made

Imminent changes


What are the relevant changes? regime

Further proposed, likely or possible changes


What are the relevant changes? regime

Further proposed, likely or possible changes


What are the relevant changes? regime

Further proposed, likely or possible changes




New ACNC: who will be affected? regime

All charities:

Eventually, all NFPs







Governance powersstandards

ACNC Act framework for principle-based minimum standards to apply to all registered entities

Effect of the standards is to enable trigger for sanction regime

Consultation still on ‘turning off’ of Corporations Act provisions ss.180-183 etc


Personal liability re management of registered entities powers

‘registered entity’= charity registered with ACNC (initially)

‘responsible entity’ = individual directors/trustees/trustee corporation responsible for decision-making/management/compliance

Different regimes and standards for:

  • bodies corporate,

  • trusts, and

  • unincorporated associations.



Definition of Charity powers

Four heads of charity:

  • The relief of poverty

  • The advancement of education

  • The advancement of religion

  • Other purposes beneficial to the community

    Statutory definition

  • Bill & Explanatory Memorandum to be released in February 2013


What hasn’t changed… powers

Requirement to self-assess entitlement to endorsements for TCC, ITEF and DGR

What has changed?

Further transparency with ACNC public portal

Annual Information Statement (AIS)


Tax Concession Charity (TCC) powers

Requirements for TCC endorsement:

  • Established and maintained for charitable purposes

  • Not-for-profit

  • Satisfy ‘in-Australia’ test

    What changes are coming?

  • Statutory definition of charity

  • Change of the ‘in-Australia’ test

  • Applications to be lodged with ACNC


Tax Concession Charity (TCC): charitable fund and ITEF powers

The fund must be applied for the purposes for which it is established.

Additional 3 tests for a charitable fund:

  • Australian purpose test; or

  • DGR test; or

  • Distribution test

    Other requirements for ITEF

  • Not provide for, or establish ancillary funds; and

  • Established solely for establishing DGRs or for the purpose of providing money, property or benefits to income tax exempt DGRs.


Deductible Gift Recipient (DGR): basics powers

Donations to a DGR is tax deductible.

More than 40 different categories of DGR set out in the Income Tax Assessment Act (Cth) 1997.

Requirements for endorsement as a DGR differ depending on which DGR category you are applying (e.g. taxation rulings, guidelines, ministerial approval).


Compliance how to… powers

Develop and maintain a compliance manual for recording self-reviews

Report to the board annually on compliance outcomes

Maintain checklist of governance standards compliance for on-going reference


How to manage governance and compliance with the new nfp regime1
How to manage governance and compliance with the new NFP regime

Anne Robinson

Prolegis Lawyers, Sydney


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