Registered charities that receive dividends or distributions from investments may be entitled to franking-credit refunds from the Australian Taxation Office.
Check your charity’s dividend or distribution statements to see if you have received franked dividends and the amount of franking credits.
To be eligible for a refund, the ATO will need to have endorsed your charity as income-tax exempt or a deductible gift recipient. You will also need to meet certain residency requirements.
To find out if you’re eligible, or for more information on how to apply, visit ato.gov.au/non-profit or call the ATO NFP advice line on 1300 130 248.
NFPs may be affected by the Common Reporting Standard (CRS).
The CRS is the single global standard for the annual collection, reporting and exchange of financial information on foreign tax residents.
The CRS requires ‘financial institutions’ to collect and report ‘financial account’ information on those deemed to be foreign tax residents.
Some NFPs will be financial institutions and may have obligations to report to the ATO. NFPs could be classified in this way either by possessing managed investments or by conducting an investment business.
Even if an NFP is not a financial institution, it may be asked by other entities for ‘self-certification’, which requires a financial institution to ask new (and some existing) financial account holders questions about their residence and entity status for tax purposes.
Where self-certification shows that an account holder is from a foreign jurisdiction, the financial account will have to be reported to the tax office.
If CRS applies, an NFP should have reported by 31 July on the period 1 July to 31 December last year. In the future, the reports will cover full calendar years.
Thousands of employers have shifted to single-touch payroll in the first month of its operation.
Employers with 20 or more employees need to report STP information on paydays, be they weekly, fortnightly or monthly. They report simultaneously superannuation information.
ATO assistant commissioner John Shepherd said that the STP information would give employers a better picture of their tax position.
‘Employees will be able to check their year-to-date tax and super information by logging into myGov and accessing ATO online services,’ he said.
The STP rollout is being staggered, and the ATO expects to have around 60,000 of the 70,000 employers on-board and reporting each payday by December.
If you have failed to move to STP, talk to your software provider if you are unsure about what you need to do. Apply for a later start date if you need to.
The ATO has several factsheets, checklists, information packs and technical guidance available to download from the ATO website.
Need more information? Visit https://tinyurl.com/y8hgy4lo
The ATO has issued guidance on company tax returns for NFPs.
The guide will help NFP clubs, societies and associations not exempt from income tax to complete their 2018 return.
The ATO has published draft ruling TR 2018/D1 about the ‘in Australia’ requirement for certain deductible-gift recipients and income-tax-exempt entities.
The ruling explains what it means for:
- A DGR to be ‘in Australia’ as a condition of its endorsement
- Certain entities to have a ‘physical presence in Australia’ as a condition for its income being exempt from tax, and
- A registered charity or DGR to have a ‘physical presence in Australia’ as a condition for their qualifying for a refund of franking credits.
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