On 9 December 2011, Treasury released an exposure draft for
legislation establishing the Australian Charities and Not for
Profits Commission (ACNC), which will commence operations on 1 July
2012. At the same time, the ACNC Implementation Taskforce has also
released a discussion paper seeking input on administrative issues
including the content of approved forms and the ACNC website, and
what education the ACNC should provide.
The exposure draft must be read in the context of the broader
not-for-profit (NFP) sector reforms, and in particular, the
consultation on governance released on 8 December 2011 (see our
The exposure draft and the discussion paper can both be accessed
here. The exposure draft and discussion paper address isues of
registration, compliance and enforcement.
Registration with the ACNC allows charities and NFPs to access
government support, including tax concessions previously accessed
through endorsement from the ATO. The proposed registration
requirements include governance requirements to be met by charities
and NFPs. Existing charities endorsed by the ATO as exempt from
income tax will not need to re-register to be a charity under the
Compliance: A framework for reporting
Charities and NFPs will be required to report to the ACNC on a
3-tiered reporting structure for small, medium and large
organisations. All organisations will be required to provide
information to the ACNC on an annual basis, comprising financial
information and activities statements.
The framework resembles the current tiered reporting structure
for charities and NFPs incorporated as companies limited by
guarantee under the Corporations Act 2001 (Cth) framework, but
impose broader and more detailed reporting requirements depending
on the size of the organisation.
Enforcement: Monitoring, investigation and active
The exposure draft provides the ACNC with broad powers to ensure
that the appropriate measures are available to the ACNC to address
compliance issues with a view to promoting public trust and
confidence in charities and NFPs. These powers include:
Investigation and intervention powers enabling
the ACNC to monitor compliance
Enforcement powers to compel compliance and
protect charitable purposes including power to enter into
undertakings; directions to do certain actions; revocation of
registration; power to suspend, remove or appoint trustees or other
responsible individuals; apply to courts for injunctions; and
Submissions on the exposure draft to Treasury are due 27
February 2012. The ACNC commences on 1 July 2012.
Gadens Lawyers is able to:
advise charities and NFP organisations seeking to make a
submission to Treasury on the exposure draft
assist existing charities and NFP organisations seeking to
assess the implications of the new compliance requirements, to
ensure a smooth transition to commence reporting.
The High Court confirmed that the terms of a trust deed are of vital importance concerning the taxation of trusts.
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