On 9 December 2011, the Government released the exposure draft
legislation for the establishment of the Australian Charities and
Not-for-profits Commission (ACNC), which will be the new national
regulator for the not-for-profit (NFP) sector.
The exposure draft, explanatory materials and fact sheets on how
the ACNC is expected to operate can be accessed through the
Treasury website. It is anticipated the ACNC legislation will
be introduced into Parliament in the first quarter of 2012.
The ACNC is expected to begin operating on 1 July 2012. An
initial task for the ACNC will be to register charities, including
public benevolent institutions, for all Commonwealth purposes.
Existing charities that are already endorsed as income tax exempt
by the Australian Taxation Office will be transitioned into the new
ACNC regime and will not have to re-register as a charity. The goal
is to create a "one stop shop".
Of key note to existing NFPs is the proposed reporting
framework. The Government has announced that this will apply for
registered charities from 1 July 2013, for information from the
previous year. The ACNC's scope will expand to cover other NFP
entities over time. Those timeframes are still to be determined and
won't start before 1 July 2015.
Reporting requirements will be proportional to the size of
registered entity, based primarily on the annual revenue of the
entity. There are three tiered categories set out in the exposure
small (revenue of less than A$250,000 and not a deductible gift
medium (revenue of between A$250,000 and A$1 million)
large registered entities (revenue A$1 million or more).
All registered NFP entities will be required to provide the ACNC
with an annual information statement. Medium and large entities
will also need to provide a financial report. Large registered
entities must have their financial report audited annually. Medium
registered entities must have their financial report either
reviewed or audited annually.
The new statutory definition of charity is intended to come into
effect on 1 July 2013 (see our recent
eAlert! on this) and from that date the ACNC will register
charities based on that definition.
It is intended that the ACNC's role will eventually expand
to regulate all NFP entities that receive government concessions
and benefits, but not before 1 July 2014.
The closing date for submissions is 20 January 2012. Given the
holiday season, this will be a tight timeframe for many
stakeholders. Queries and submissions should be sent to NFPReform@treasury.gov.au.
If you are considering making a submission on the draft
legislation, we can assist.
In addition, we intend to host a NFP roundtable in the new year
to discuss, in more detail, the draft legislation and its
implications for the NFP sector.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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