mi member compliance charity reform update compliance with mi member standards time for questions...

MI Member ComplianceCharity reform update

Compliance with MI Member Standards

Time for questions

Please note: This seminar does not provide legal advice

NFP Reforms – Overview

NFP Reforms – since 1995

15.5 Million words; 50,000 pages.

Gov’t commissioned 3,000 reports.

NFP Sector – 4,500 responses; 29,000 pages

Prof Myles McGregor Lowndes – CMA Conference 2013

NFP Reforms – Overview

‘In Australia’ Legislation

ACNC Act

Statutory Definition of Charity

Governance Regulations

UBIT - scrapped

Other Reforms impacting charities

A multitude of Federal and State/Territory laws including:

Privacy

OH & S

Working with children

Fundraising etc

ACNC – Background Charity Status determined by ATO

3 December 2012 – ACNC became operative

• Public information portal

• Decider of charitable status but not tax concessions (ATO)

• Minimum governance standards

• Financial reporting framework

• External conduct standards – not yet

ACNC – Current obligations

Good Governance • Five governance standards• Ensure objects in constitution are consistent with

mission statement and practice.

Annual Information Statement

Keep records

Update details – constitution, responsible persons etc

ACNC – Future

To be abolished and replaced by Centre of Excellence

Options paper: • Self-reporting requirements – back to ASIC

• Returning determination of charitable status to ATO

• Charities required to maintain publically accessible website with names of responsible persons, details of all government funding, financial reports.

Nothing certain

Statutory Definition of Charity

Charities Act passed in June 2013 & Commenced 1 Jan 2014

Definition previously based on common law

Gives certainty to ‘Advancing Religion’ as a statutory Head of Charity

Codifies many other purposes as charitable

“In Australia” Requirements - Background

The issues (1995):

Control of funds going off-shore – tax avoidance, anti-terrorism and money laundering.

International treaty obligations – regulate movement of money between countries.

Need to protect the integrity of charitable activity

“In Australia” Requirements - Background

The Answer:

Taxation law used as a control mechanism

Taxation Laws Amendment Act (No 4) 1997

Income tax exempt charities barred from sending funds overseas unless they meet certain conditions.

“In Australia” Requirements - Current

To be endorsed by the ATO as income tax exempt, a charity must meet one of three tests:

“In Australia” test

Deductible Gift Recipient (DGR) test

Prescribed by law test

Missions Interlink and its Members are prescribed by law

“In Australia” Requirements – Reform

The issues:

Law below treaty obligations

Word Investments case

Government announced in 09/10 budget that it would amend the “in Australia” Special Conditions for tax concessions to better control those organisations passing money to overseas charities and other entities.

“In Australia” Requirements – Reform Process

July/August 2011 – first exposure draft & public consultation

April/May 2012 – second exposure draft & public consultation

August 2012 – Bill introduced to Parliament

June 2013 – Some of the provisions of 2012 Bill were enacted

August 2013 –2012 Bill lapsed at the dissolution of Parliament

December 2013 – Current Government announced it would proceed with reforming the “in Australia” requirements

March 2014 – new exposure draft & public consultation

“In Australia” Requirements – Proposed The restated “in Australia” special conditions move away from

expenditure-based test to allow consideration of a wide range of circumstances.

“Tracing” of money given to another enitity.

Stricter conditions on “disregarded amounts”.

Much more difficult and greater compliance required for organisations with overseas activities to meet “in Australia” conditions.

“In Australia” Requirements – Proposed

The exposure draft maintains the existing prescription of Missions Interlink and its Members, exempting them from the new “in Australia” requirements for income tax entities.

Wait and see……

Exempt Foreign Income – personal income taxThe issue (2009):

• Australians earning large sums of money overseas not subject to Australian income tax.

• “Better targeting the income tax exemption for Australians working overseas”.

Changes to Section 23AG of the Income Tax Assessment Act 1936 effective 2009/2010.

Exempt Foreign Income – personal income taxSection 23AG:

Foreign income of personnel (Australian residents for income tax) working continuously overseas for more than 91 days is exempt from Australian income tax if directly attributable to activities of a prescribed institution exempt from Australian income tax because it is pursuing objectives outside Australia.

Personnel of MI Accredited Members fit this exemption.

Income to be declared as “exempt foreign income”.

Missions Interlink Member Compliance with MI Standards

Missions Interlink Standards Statement

Missions Interlink Member Accreditation Standards

MI Member log-in to www.missionsinterlink.org.au

Username: missions Password: Psalm145

http://www.missionsinterlink.org.au/


Missions Interlink Standards Statement





1. An Australian organisation





2. Financial Standards





3. Governance and Accountability Structure





4. Tax Status





5. Accreditation Confirmation




Missions Interlink Member Accreditation Renewal

2014 Member Declaration

Use web link in renewal letter

Questions

mi member compliance charity reform update compliance with mi member standards time for questions...

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