Following Committee Reports to Parliament this week, the ACNC start date is in doubt, with debate on amendments likely to delay passage of the ACNC Bills past 1 October 2012. The future of the ‘in Australia’ legislation is also unclear.
ACNC Bills delayed
The Joint Committee on Corporations and Financial Services and the Senate Community Affairs Legislation Committee have now reported to Parliament on the Australian Charities and Not-for-Profits Commission Bills and ‘in Australia’ Bills.
Both Committees concentrated on the ACNC legislation, with an eye to the proposed 1 October 2012 start date, which is fast approaching. Neither Committee requested any significant changes; they both recommended that the ACNC Bills be passed by the Parliament essentially in their current form.
However, the Committees were divided, with two dissenting reports filed with the Joint Committee Report and also the Senate Committee Report. Due to the numbers required by the government to pass the legislation through Parliament, this means further delays while amendments are drafted and debated.
As a result, the proposed October start date for the ACNC is in doubt. Only four sitting days remain before 1 October 2012, and only 19 before Christmas. Some in the sector are also concerned that if the ACNC Bill does not pass this year, the entire reform project will fail. ACOSS and other organisations have released media statements affirming their support for the ACNC in an effort to get the Bills through.
Future of ‘in Australia’ Bill unclear
The Joint Committee and the Senate Committee recommended passing theTax Laws Amendment (Special Conditions for Not-for-Profit Concessions) Bill 2012, which contains the proposed ‘in Australia’ amendments. Both Committees felt that guidance from the ATO and from Treasury would be sufficient address sector concerns.
Again, however, the Committees were divided. Some members proposed amendments, particularly to the definition of ‘not-for-profit entity’, and argued for delaying the legislation to allow a more rigorous examination.
It is not clear at this stage what the future of the tax Bill will be, given the pressing need to resolve ACNC issues in time for 1 October 2012. The essential rationale and structure of the Bill was accepted by all members of both Committees, so we expect the impact on charities and NFPs to be similar to previous predictions.
What this means for you
ACNC
If amendments can be agreed upon, it appears likely that the ACNC Bills will pass, though not in time for 1 October 2012. However, the proposed amendments do not affect the basic structure of the Bill, so organisations’ preparations for the ACNC have not been wasted. We recommend that you continue preparing for the start of the new regulator by checking your organisation’s governing documents are up-to-date and accurately reflect your objects and activities. Remember: the self-review requirements mean that you should be checking your continued eligibility for tax concessions every 12 months.
‘In Australia’
Organisations with DGR status or income tax concessions which are involved in or support others’ involvement in overseas activities should monitor developments closely. You should remain aware of any possible changes you may need to make to your activities or business structure if the ‘in Australia’ legislation proceeds.
For specific advice on how these developments will affect you or your organisation, feel free to call us on (07) 3837 3600.
Disclaimer: This update provides an overview only of the current status of the new legislation, and in the interest of brevity, it is not all inclusive. It should not be considered to be legal advice. You should obtain legal advice for your or your organisation’s specific circumstances rather than relying on general information.