How to manage governance and compliance with the new nfp regime
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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

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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

Introduction

Reform Timeline

ACNC role and impact

Governance Standards

Definition of Charity

Tax Concession Charity (TCC)

Deductible Gift Recipient (DGR)

Compliance …


Introduction

Introduction

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

  • governance

  • compliance


Scope of reforms

Scope of reforms


How to manage governance and compliance with the new nfp regime

ReformTimeline

Changes already made

Imminent changes


How to manage governance and compliance with the new nfp regime

What are the relevant changes?

Further proposed, likely or possible changes


How to manage governance and compliance with the new nfp regime

What are the relevant changes?

Further proposed, likely or possible changes


How to manage governance and compliance with the new nfp regime

What are the relevant changes?

Further proposed, likely or possible changes


How to manage governance and compliance with the new nfp regime

New ACNC and related changes: structure of ACNC


How to manage governance and compliance with the new nfp regime

New ACNC: roles of ACNC?


How to manage governance and compliance with the new nfp regime

New ACNC: who will be affected?

All charities:

Eventually, all NFPs


How to manage governance and compliance with the new nfp regime

New ACNC: Day 1 impact on you and your board?


How to manage governance and compliance with the new nfp regime

New ACNC: Reporting and other ongoing requirements?


How to manage governance and compliance with the new nfp regime

New ACNC: Reporting and other ongoing requirements?


How to manage governance and compliance with the new nfp regime

New ACNC: Extensive new compliance, enforcement and related powers

Compliance pyramid


How to manage governance and compliance with the new nfp regime

New ACNC: Extensive new compliance, enforcement and related powers

Compliance pyramid


How to manage governance and compliance with the new nfp regime

Governancestandards

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


How to manage governance and compliance with the new nfp regime

Personal liability re management of registered entities

‘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.


How to manage governance and compliance with the new nfp regime

Personal liability re management of registered entities


How to manage governance and compliance with the new nfp regime

Definition of Charity

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


How to manage governance and compliance with the new nfp regime

What hasn’t changed…

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)


How to manage governance and compliance with the new nfp regime

Tax Concession Charity (TCC)

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


How to manage governance and compliance with the new nfp regime

Tax Concession Charity (TCC): charitable fund and ITEF

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.


How to manage governance and compliance with the new nfp regime

Deductible Gift Recipient (DGR): basics

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).


How to manage governance and compliance with the new nfp regime

Compliance how to…

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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