Upload
richard-woodfork
View
221
Download
7
Embed Size (px)
Citation preview
www.kellyco.com.au | www.kellyco.com.au
Australian Charities and Not-for-profits Commission (ACNC)
Nick Karagiannis, [email protected] 2013
Kelly & Co.
www.kellyco.com.au | Page 2
The Role of the ACNC
New independent regulator of the charity sector Charities must now report to and notify of certain changes The ACNC takes over some functions of the ATO. In particular,
it is now responsible for determining an organisation’s charity status (ITE/DGR remain with ATO)
The ACNC has broad investigatory and disciplinary powers
www.kellyco.com.au | Page 3
Rationale
Reduce red tape and reporting burdens Support the not-for-profit sector Maintain trust in the sector Increase transparency and accountability
www.kellyco.com.au | Page 4
New Definition of “Charity”
The federal government is expected to introduce a new definition of a “charity” by 1 July 2013
This new definition will be consistent across all States The ACNC will by bound by this definition when it comes
into effect In the interim, the ACNC will continue to apply the existing
common law based definition
www.kellyco.com.au | Page 5
Charity
Charitable Purpose: the relief of poverty; the advancement of education; the advancement of religion; or other purposes beneficial to
the community
Not For Profit
For the Public benefit
www.kellyco.com.au | Page 6
Registration
Registration with the ACNC is voluntary However, it is necessary to be registered if you want to
benefit from Commonwealth charity tax concessions such as: Income tax concessions Deductible Gift Recipient status GST/FBT concessions
The ACNC maintains a register of charities. This register is publicly available online
www.kellyco.com.au | Page 7
Registration: Existing Charities
You are automatically registered with the ACNC if your organisation was registered as a charity with ATO before 3 December 2012
However, if you are a religious charity which self-assessed as being income tax exempt, you will need to register
Charities automatically registered have until 2 June 2013 to opt-out
www.kellyco.com.au | Page 8
Registration: Classification of Charities
Upon registration the ACNC will classify your charity according to its size: Small: revenue under $250,000 Medium: revenue $250,000 or more, but less than $1
million Large: revenue of $1 million or more
The size of your charity will determine the scope of the obligations you owe to the ACNC
www.kellyco.com.au | Page 9
Registration: New Charities
The ATO will accept the ACNC’s determination of your organisation’s charity status and determine if you are eligible for any Commonwealth tax concessions
In the same application used to register with the ACNC, you can apply for charity tax concessions with the ATO
The ATO remains responsible for ensuring compliance with other requirements
www.kellyco.com.au | Page 10
Obligations of Registered Charities
3 important obligations to the ACNC: Reporting Notifying Compliance with governance standards
The scope of an obligation may depend on the size of your charity
Some obligations do not yet apply
www.kellyco.com.au | Page 11
Obligations: Reporting
Registered charities must provide an Annual Information Statement
This is a relatively concise document and contains information about your charity’s: operations number of staff type of beneficiaries
www.kellyco.com.au | Page 12
Obligations: Reporting
The Annual Information Statement is due 6 months after the end of your usual reporting period
For example, if your usual reporting period is 1 July 2012 to 30 June 2013, the statement will fall due by 31 December 2013
Guides on how to complete annual information statement are available from the ACNC
The ACNC has issued a consultation paper noting that additional information (mostly financial) will need to be reported in future annual information statements
www.kellyco.com.au | Page 13
Obligations: Reporting
From 1 July 2013, medium and large charities will also need to prepare an annual financial report. The nature of these reports vary: for medium charities: a reviewed or audited annual
financial report for large charities: an audited annual financial report
If your reporting period is 1 July 2013 to 30 June 2014, this statement must be submitted by before 31 December 2014.
www.kellyco.com.au | Page 14
Obligations: Reporting
Content requirements of the financial report not yet finalised
Draft regulations suggest charities will be required to provide: a financial statement for the year; notes to the financial statement; and a declaration by the responsible entity about the
statement
www.kellyco.com.au | Page 15
Obligations: Notification
From 3 December 2012, registered charities must notify the ACNC of changes to its: Legal name Address for service Governing/Executive members Governing rules
Small charities must notify the ACNC no later than 60 days after it becomes aware of change
For medium/large charities, no later than 28 days
www.kellyco.com.au | Page 16
Obligations: Notification
If your charity is established as a company under the Corporations Act 2001 you will no longer be required to report to ASIC on any: Change to constitution Change of address Change of Governing/Executive members
You should instead notify the ACNC of any such changes
www.kellyco.com.au | Page 17
Obligations: Governance
From 1 July 2013, your charity must adhere to minimum governance standards and external conduct standards
‘Governance’ is the set of practices and procedures in place to ensure that an entity operates to achieve its objectives in an effective and transparent manner
Draft regulations currently before Parliament
www.kellyco.com.au | Page 18
Obligations: Governance
The Standards are principle-based, specifying the outcome to be achieved, rather than detailing how an entity must meet the Standards:
1. Clear purposes and NFP character of charity2. Accountability to members3. Compliance with Australian law4. Responsible management of financial affairs5. Suitability of “responsible entities” (i.e.
Board/executives)6. Duties of responsible entities
www.kellyco.com.au | Page 19
Obligations: Governance
Your charity will be expected to decide how to best meet the standards
The ACNC Commissioner is expected to release guidance material to assist in meeting these standards
The Commissioner will assume that registered charities are in compliance unless there is evidence to the contrary
www.kellyco.com.au | Page 20
Exemptions for Small Religious Charities
If your organisation is classified as a small Religious Charity by the ACNC, certain exemptions will apply
You will not be required to: provide financial statements adhere to governance standards
But you must still provide an Annual Information Statement
www.kellyco.com.au | Page 21
Liability of Board Members/Executives/Directors
exercising powers with the degree of care and diligence that a reasonable individual would exercise if they were a responsible entity of the charity
acting in good faith in the best interests of the charity, to further the purposes of the charity
not misusing the responsible entity’s position not misusing information disclosing perceived or actual material conflicts of interest ensuring the financial affairs of the charity are managed in a responsible
manner not allowing the charity to operate while insolvent
www.kellyco.com.au | Page 22
Liability of Directors
The charity will be accountable to the ACNC for compliance with the governance standards
Directors will liable for any breaches if the: relevant act was deliberate; or omission was dishonest, due to gross negligence or
recklessness
www.kellyco.com.au | Page 23
Liability of Directors
If your charity is unincorporated: Obligation imposed on the charity is imposed on each
director Any liability of the charity is payable by each director Directors can avail themselves of the defences of
“illness” or “all reasonable steps taken”
www.kellyco.com.au | Page 24
Important Dates – Recap
From 3 December 2012: record keeping notification of any changes to ACNC
From 1 July 2013: provide information statement within 6 months comply with governance standards
From 1 July 2013 (for medium/large charities only) Provide financial report within 6 months of end of
current full financial year
www.kellyco.com.au | Page 25
Implications for Charities
You need to be aware of the reporting obligations to the ACNC and observe the reporting and notification deadlines
You will need to keep records sufficient to meet reporting obligations
You need to keep sufficient financial records for the financial reporting obligations
www.kellyco.com.au | Page 26
Implications for Charities
You will still need to report at a State level to obtain State charity tax concessions relating to: Stamp duty; Payroll; and/or Land tax
www.kellyco.com.au | Page 27
Future Changes
Possible introduction of a “Charity Passport” Charity Passport would phase out the need the report
separately to State and Commonwealth bodies
www.kellyco.com.au |
Kelly & Co. LawyersLevel 21, Westpac House
91 King William Street
Adelaide SA 5000
T: +61 8 8205 0800
www.kellyco.com.au