Charities and Not-for-profits Commission

1. Charities and Not-for-profits Commission Australian Salary Packaging Industry Association 7 September 2012 Murray Baird Assistant Commissioner General Counsel Australian Charities and Not-for Profits Commission

2. An Australian Charities Commission 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 Federal Budget May 2011

3. Trust Maintain, protect and enhance public trust and confidence in the Australian not-for-profit sector.

4. Health Support and sustain a robust, vibrant, independent and innovative Australian not-for-profit sector

5. Cut Red Tape Reduction of unnecessary regulatory obligations on the Sector

6. Three Committee Inquiries and a year of Consultation “I feel a bit like I’ve been sitting in the back seat of the car with my two brothers for hours arguing over what the rules of the game will be once we get to the beach, when the truth is we all know when we get there we’ll just start splashing around in the water and everyone will have a good time.” David Crosbie Community Council Australia

7. Three Act Play changes the Scene • Australian Charities and Not-for-profits Commission Bill 2012 • Australian Charities and Not-for-profits Commission (Consequential and Transitional) Bill 2012 • Tax Laws Amendment (Special Conditions for Not-for-profit Concessions) Bill 2012

8. Who will the ACNC regulate? • Existing charities that currently access Commonwealth tax concessions • Existing and new charities that want to apply for Commonwealth tax concessions and other benefits • 56,000 charities, 10% of broader NFP sector • Possibly other types of NFPs but not before 2014

9. ACNC Functions • Registration - One Stop Shop • Information Portal and Charity Passport • Compliance • Education and Guidance

10. What the Economics Committee said “The general thrust of submissions to the Committee was that stakeholders supported the Bills, but they had a range of suggestions for improving the Bills.” Julie Owens MP Chair “Liberal Members of the Committee are not satisfied that the consultation process has been sufficiently rigorous as to address the concerns that many sector agencies have with these Bills.” Liberal Members of the Committee

11. Registration and Information Portal • Register charities (ATO apply tax concessions) • Establish and maintain an up-to-date, publicly searchable register of charities • Establish a one-stop-shop for charities which enables them to • apply for charity registration, • apply for ABN, • access Commonwealth tax concessions, and • potentially access other services including state and territory tax concessions

12. Registration • Transition - charities currently endorsed by the ATO to access tax concessions will automatically be registered with ACNC • Registration is voluntary • Registration is free • Registration is required for access to Commonwealth tax concessions and other benefits • ATO will continue to apply tax concessions

13. One Stop Shop • For the public to search information on charities and to learn about the charitable sector • For funders and donors to do a financial and governance health check on individual charities • For charities to: • apply for charity registration • apply for ABN • access Commonwealth tax concessions, and • potentially access other services including state and territory tax concession

14. www.acnc.gov.au

15. The Charity Passport • Provide a ‘report once, use often’ service for charities to assist in reduction of regulatory impost with co-operation of States/Territories

16. Report once, use often • Charity Passport for ACNC to provide commonly required data across government. This data will come from registration and Annual Information Statement • Annual Information Statement will keep Register up to date and provide ACNC with data on charitable activity, finances and governance • Financial Reports for medium and large charities will differ for different types of charity – subject of major project between ACNC & Tsy

17. Regulatory Approach Light-touch, risk-based, evidence-based approach Provide information, guidance and education Use graduated powers, provide opportunity for self-correction Regulatory Principles: relevance, proportionality, consistency, transparency, timeliness.

19. Education, Guidance and Compliance • Provide timely information, guidance and advice services for the sector and the public online, by phone and email • Provide searchable register of data on charities • Assist charities meet obligations, but monitor compliance and investigate regulatory breaches • Maintain, protect and enhance public trust & confidence in the Australian NFP sector

20. Education and guidance

21. ACNC Registration of charities (including Public Benevolent Institutions) for Commonwealth purposes from 1 October 2012 Establish Reporting Framework and Information Portal Work with Commonwealth, State and Territory agencies to consolidate reporting and reduce compliance burden Australian Tax Office – Non-Profit Centre Endorsement for tax concessions Income Tax exemption Deductible Gift Recipient (DGR) Fringe Benefits Tax exemption or rebate GST Concessions Refund of franking credits Relationship to ATO

22. Fringe Benefits “To access the numerous concessions, exemptions and benefits entities have to [be] charities” “In cases where… concessions, exemptions and benefits are earmarked for a particular subtype of charity, amendments require ACNC Registration as a particular subtype” EM Consequential Amendments Act

23. Subtypes of charity

24. Fringe benefits and ACNC Act - everyone is “registered” • S.57(a) “religious institution” becomes “registered religious institution”; • 57A(1) “public benevolent institution” becomes “registered public benevolent institution” • 57A(5) (a)&(b) “health promotion charity “ becomes “registered health promotion charity” • 58T(a) (ii) “religious practitioner” add “of a registered religious institution” • 123E(2) (a) “charitable institution” becomes “registered charity”

25. Fringe Benefits and Special Conditions Act • 5 B(1E) “non-profit societies and associations” becomes “societies and associations that are rebatable employers” • 65 J “non profit” becomes “not-for-profit” and a new table is inserted setting out the categories of rebatable employer.

26. The New Table in s. 65(J)

27. What will charities need to know and do on 1 October 2012? Charities that were registered with the ATO prior to 1 October do not need to take any action unless: • They wish to opt out of registration on the approved form by 1 March 2013. • Religious institutions not endorsed as charities which are self-assessing as income tax exempt and wish to be registered as charities, will need to notify us of their type and subtype in an approved form within 12 months of ACNC commencement

28. What Charities need to know and do 1 July 2013 - All registered charities will need to provide to the Commissioner: • An Annual Information Statement by 31 December 2013 for 2012-13 financial year unless you have a substituted accounting period in which case it is 6 months after due date 1 July 2014 - Medium and large registered charities will need to provide to the Commissioner: • A financial report by 31 December 2014 for 2013-14 financial year unless you have a substituted accounting period in which case it is 6 months after the due date

29. Registering charities Dynamic online form to collect information to: assess an organisations eligibility to become a registered charity display on the public portal enable the Australian Taxation Office to assess an organisation’s eligibility for tax concessions

30. ACNC Register From 1 October 2012 the register will display a registered charity’s: Australian Business Number name state a link to the organisations record on the Australian Business Register

31. ACNC Register From 1 October 2013 additional information on the public register will include: contact details charitable purposes date of effect of registration governing rules name and position held of the office bearers notices served on the charity other information information statements financial reports (2014)

32. ACNC Register Examples of other information that may appear on the register that charities choose to include activities and beneficiaries all locations of operations annual reports data about the charities individually and collectively

33. Public Register

34. Advice to Salary Packaging Gurus • Understand the change of Scene – 3 Acts; • Get a Consolidated Version of Fringe Benefits Tax Assessment Act post 1 October; • The intent is the same – only the names have been changed • Know the difference between a charity, PBI and HPC • Put the Charities Register in your favorites on your search engine • Call our advice line if you get into trouble.

35. Thank you Email: murraybaird@ato.gov.au ACNCtaskforcemailbox@ato.gov.au Website: http://acnctaskforce.treasury.gov.au YouTube: http://www.youtube.com/acnctaskforce Twitter: @ACNCtaskforce Facebook: http://www.facebook.com/acnctaskforce?sk=wall