A New Tax System (Tax Administration) Act 1999 (179 of 1999)

Schedule 8   Endorsing entities as exempt from income tax

Income Tax Assessment Act 1997

15   Section 50-80 (link note)

Repeal the link note, substitute:

Subdivision 50-B - Endorsing charitable entities as exempt from income tax

Guide to Subdivision 50-B

50-100 What this Subdivision is about

This Subdivision sets out rules about endorsement of charitable institutions and trust funds for charitable purposes as exempt from income tax. Such entities are only exempt from income tax if they are endorsed.

Table of sections

Endorsing charitable entities as exempt from income tax

50-105 Endorsement by Commissioner

50-110 Entitlement to endorsement

50-115 Applying for endorsement

50-120 Dealing with an application for endorsement

50-125 Notifying outcome of application for endorsement

50-130 Date of effect of endorsement

50-135 Review of refusal of endorsement

50-140 Checking entitlement to endorsement

50-145 Telling Commissioner of loss of entitlement to endorsement

50-150 Partnerships and unincorporated bodies

50-155 Revoking endorsement

50-160 Review of revocation of endorsement

[This is the end of the Guide.]

Endorsing charitable entities as exempt from income tax

50-105 Endorsement by Commissioner

The Commissioner must endorse an entity as exempt from income tax if the entity:

(a) is entitled to be endorsed as exempt from income tax; and

(b) has applied for endorsement.

50-110 Entitlement to endorsement

General rule

(1) An entity is entitled to be endorsed as exempt from income tax if the entity meets all the relevant requirements of this section.

Which entities are entitled to be endorsed?

(2) To be entitled, the entity must be an entity covered by item 1.1, 1.5, 1.5A or 1.5B of the table in section 50-5.

Requirement for ABN

(3) To be entitled, the entity must have an *ABN.

(4) However, for a trust:

(a) covered by item 1.5 of the table in section 50-5 because the trust is covered by paragraph 50-80(1)(d); or

(b) covered by item 1.5A of the table in section 50-5 (because the trust is covered by paragraph 50-80(1)(c));

to be entitled, the existing trust mentioned in paragraph 50-80(1)(a) must have an *ABN.

Requirement to meet special conditions

(5) To be entitled, either:

(a) the entity must meet the relevant conditions referred to in the column headed "Special conditions" of whichever of items 1.1, 1.5, 1.5A and 1.5B of the table in section 50-5 covers the entity; or

(b) both of the following conditions must be met:

(i) the entity must not have carried on any activities as a charitable institution (if the entity is covered by item 1.1 of the table in section 50-5) or for public charitable purposes (if the entity is covered by item 1.5, 1.5A or 1.5B of that table);

(ii) there must be reasonable grounds for believing that the entity will meet the relevant conditions referred to in the column headed "Special conditions" of whichever of items 1.1, 1.5, 1.5A or 1.5B of the table in section 50-5 covers the entity.

(6) To avoid doubt, the condition set out in section 50-52 (requiring the entity to be endorsed under this Subdivision) is not a relevant condition for the purposes of subsection (5).

50-115 Applying for endorsement

(1) An entity may apply to the Commissioner for endorsement.

(2) The application:

(a) must be in a form approved by the Commissioner; and

(b) must be signed for the entity, or include the entity's *electronic signature if the application is *lodged electronically; and

(c) must be lodged at, or posted to, an office or facility designated by the Commissioner as a receiving centre for applications of that kind; and

(d) may be lodged electronically.

Note: The Commissioner could approve a form that is part of an application form for an ABN.

50-120 Dealing with an application for endorsement

Requesting further information or documents

(1) The Commissioner may request an applicant to give the Commissioner specified information, or a specified document, the Commissioner needs to decide whether the applicant is entitled to endorsement unless the information or document is given.

Treating application as being refused

(2) After the time worked out under subsection (3), the applicant may give the Commissioner written notice that the applicant wishes to treat the application as having been refused, if the Commissioner has not given the applicant before that time written notice that the Commissioner endorses or refuses to endorse the applicant.

Note: Section 50-125 requires the Commissioner to give the applicant written notice if the Commissioner endorses or refuses to endorse the applicant.

(3) The time is the end of the 60th day after the application was made. However, if before that time the Commissioner requests the applicant under subsection (1) to give information or a document, the time is the later of the following (or either of them if they are the same):

(a) the end of the 28th day after the last day on which the applicant gives the Commissioner information or a document he or she has requested;

(b) the end of the 60th day after the application was made.

(4) If the applicant gives notice under subsection (2), section 50-135 operates as if the Commissioner had refused the application on the day on which the notice is given.

Note: Section 50-135 lets the applicant object against refusal of an application in the manner set out in Part IVC of the Taxation Administration Act 1953. That Part provides for review of the refusal objected against.

(5) The notice given by the applicant:

(a) may be *lodged electronically; and

(b) must be signed for the applicant, or include the applicant's *electronic signature if the application is *lodged electronically.

50-125 Notifying outcome of application for endorsement

(1) The Commissioner must give the applicant written notice if:

(a) the Commissioner endorses the applicant; or

(b) the Commissioner refuses to endorse the applicant.

(2) The Commissioner may give the notice by way of electronic transmission. This does not limit the ways in which the Commissioner may give the notice.

50-130 Date of effect of endorsement

(1) The endorsement has effect from a date specified by the Commissioner.

(2) The date specified may be any date (including a date before the application for endorsement was made and a date before the applicant had an *ABN).

Note: An entity may fail to apply for endorsement by 30 June 2000. The Commissioner may endorse an application by such an entity from 1 July 2000.

50-135 Review of refusal of endorsement

If the applicant is dissatisfied with the Commissioner's refusal to endorse the applicant in accordance with the application, the applicant may object against the refusal in the manner set out in Part IVC of the Taxation Administration Act 1953.

Note: That Part provides for review of the refusal objected against.

50-140 Checking entitlement to endorsement

(1) The Commissioner may request an entity that is endorsed as exempt from income tax to give the Commissioner information or a document that is relevant to the entity's entitlement to endorsement. The entity must comply with the request.

Note 1: Section 50-110 sets out the conditions for an entity to be entitled to be endorsed.

Note 2: This Act is a taxation law for the purposes of the Taxation Administration Act 1953. Failure to comply with this subsection is an offence against section 8C of that Act. Also, the Commissioner may revoke the endorsement of the entity under section 50-155 if it fails to comply with this subsection.

Note 3: Section 50-150 modifies the way this subsection operates in relation to partnerships and unincorporated bodies.

(2) The request:

(a) is to be made by notice in writing to the entity; and

(b) may ask the entity to give the information in writing; and

(c) must specify:

(i) the information or document the entity is to give; and

(ii) the period within which the entity is to give the information or document.

The period specified under subparagraph (c)(ii) must end at least 28 days after the notice is given.

(3) The Commissioner may give the notice by way of electronic transmission. This does not limit the ways in which the Commissioner may give the notice.

(4) If the request is for the entity to give information in writing, the document setting out the information:

(a) must be given to the Commissioner; and

(b) may be *lodged electronically; and

(c) must be signed for the entity, or include the entity's *electronic signature if the document is lodged electronically.

50-145 Telling Commissioner of loss of entitlement to endorsement

(1) Before, or as soon as practicable after, an entity that is endorsed as exempt from income tax ceases to be entitled to be endorsed, the entity must give the Commissioner written notice of the cessation.

Note 1: An entity ceases to be entitled to endorsement if it ceases to be covered by item 1.1, 1.5, 1.5A or 1.5B of the table in section 50-5 or ceases to meet the special conditions identified in the item that covers it: see section 50-110.

Note 2: This Act is a taxation law for the purposes of the Taxation Administration Act 1953. Failure to comply with this subsection is an offence against section 8C of that Act.

Note 3: Section 50-150 modifies the way this subsection operates in relation to partnerships and unincorporated bodies.

(2) The notice:

(a) may be *lodged electronically; and

(b) must be signed for the entity, or include the entity's *electronic signature if the document is lodged electronically.

(3) Subsection (1) does not apply to an entitlement to endorsement ceasing because the entity ceases to have an *ABN.

50-150 Partnerships and unincorporated bodies

Application to partnerships

(1) If, apart from this subsection, section 50-140 or 50-145 would impose an obligation on a partnership, the obligation is imposed on each partner, but may be discharged by any of the partners.

Application to unincorporated bodies

(2) If, apart from this subsection, section 50-140 or 50-145 would impose an obligation on an unincorporated association or body, the obligation is imposed on each member of the committee of management of the association or body, but may be discharged by any of the members of the committee.

Defences for partners and members of committee of management

(3) In a prosecution of a person for an offence against section 8C of the Taxation Administration Act 1953 because of subsection (1) or (2), it is a defence if the person proves that the person:

(a) did not aid, abet, counsel or procure the act or omission because of which the offence is taken to have been committed; and

(b) was not in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the act or omission because of which the offence is taken to have been committed.

50-155 Revoking endorsement

(1) The Commissioner may revoke the endorsement of an entity as exempt from income tax if:

(a) the entity is not entitled to be endorsed as exempt from income tax; or

(b) the Commissioner has requested the entity under section 50-140 to provide information or a document that is relevant to its entitlement to endorsement and the entity has not provided the requested information or document within the time specified in the request.

Note: Section 50-110 sets out the conditions for an entity to be entitled to be endorsed.

(2) The revocation has effect from a day specified by the Commissioner (which may be a day before the Commissioner decided to revoke the endorsement).

(3) However, if the Commissioner revokes the endorsement because the entity is not entitled to it, the Commissioner must not specify a day before the day on which the entity first ceased to be entitled.

(4) The Commissioner must give the entity written notice if the Commissioner revokes its endorsement.

(5) The Commissioner may give the notice by way of electronic transmission. This does not limit the ways in which the Commissioner may give the notice.

50-160 Review of revocation of endorsement

If the entity is dissatisfied with the revocation of its endorsement as exempt from income tax, the entity may object against the revocation in the manner set out in Part IVC of the Taxation Administration Act 1953.

Note: That Part provides for review of the revocation objected against.

[The next Division is Division 51.]