Tax Launch at Emergency Volunteers Summit

The Commissioner of Taxation, Michael Carmody launched two new publications for the Not for Profit sector at the recent Emergency Management Australia Volunteer Summit 2005.

More than 400 volunteers from across Australia and the region converged on the nation’s capital to take part in discussions, hear from keynote speakers and focus on the strategic direction of the emergency volunteer sector.

Carmody told the delegates at the summit that the development of tailored products for the Not for Profit community is part of the Tax Office’s commitment to assist organisations and their volunteers meet their tax obligations.

Carmody said the goal is to provide simple, practical and effective services to those involved in the financial aspects of Not for Profit organisations to minimise the time they spend on tax affairs.

Last year, the Tax Office released a ‘Volunteers’ guide which explains the tax treatment of transactions that commonly occur between Not for Profit organisations and their volunteers.
He said the ATO received a lot of positive feedback and so has launched an updated and enhanced version.

It describes and explains the tax treatment of common payments made to volunteers such as honoraria, allowances and reimbursements.

It also contains guidance on a range of tax issues affecting volunteers including GST, fringe benefits tax and pay as you go withholding obligations.

To improve the development of products and services for the sector including the ‘Volunteers’ guide, the ATO sought input from a range of NFP organisation representatives.

Carmody said that working with the Not for Profit sector helps to better understand the needs of the organisations and what they need from the ATO to meet their tax obligations.

He said the ATO recognises that fundraising is a complex issue because of the many and varied activities undertaken in this area.

On one hand volunteers donate their time and energy to conduct a range of activities such as sausage sizzles and raffles, while on the other, businesses and other commercial entities offer their services and expertise to raise funds.

The ATO conducted a survey of volunteers from across the sector which provided it with an insight into the most common types of fundraising activities and the tax issues requiring a greater degree of clarity and understanding.

It then worked with peak representative bodies, inviting them to comment on the publication’s first draft. The Charities Consultative Committee and the ATO’s Education Industry Partnership also provided valuable input.

The Volunteers and Tax Guide explains the tax treatment of common payments made to volunteers. It provides guidance on the goods and services tax (GST), fringe benefits tax and pay as you go withholding obligations that may arise on transactions involving volunteers.

This guide is for volunteers and Not for Profit organisations that deal with volunteers including charities, clubs, societies and associations.

Non for Profits organisations and fundraising publication explains the various concessions that exist under the income tax, GST and fringe benefits laws to assist non-profit organisations with their fundraising activities.

The guide also outlines the tax obligations fundraisers should be aware of.
When undertaking fundraising activities, non-profit organisations may also need to deal with state and local government authorities and comply with their requirements.

The fundraising guide provides information on:

Tax deductible gifts
For organisations that want to receive tax deductible gifts, it explains the requirements for a gift to be tax deductible and the records donors need to keep.

Tax deductible contributions
From 1 July 2004, individuals may be entitled to claim a tax deduction for contributions they make in relation to fundraising events such as fundraising dinners and charity auctions.

Non-profit organisations and income tax
Whether a Not for Profit organisation has to pay income tax on proceeds it receives from its fundraising activities or can claim tax deductions for the expenses it incurs will depend on whether or not the organisation is exempt from income tax.

Goods and services tax
When an organisation undertakes fundraising activities, the related transactions may be subject to GST. There are a range of GST concessions for NPF organisations. Some of the concessions may be applied to the organisation’s fundraising activities, while others will help the organisation meet its GST obligations.

Fringe benefits tax
Fringe benefits tax (FBT) is a tax payable by employers who provide fringe benefits to their employees or to associates of their employees. FBT may apply when an organisation conducts fundraising activities and provides benefits to its employees. There are, however, certain FBT concessions that can reduce the organisation’s liability.

State government requirements
Fundraising activities such as bingo, raffles and doorknock appeals are regulated by state and territory authorities. Each state has its own laws for these activities and they have provided an overview of their requirements.

Local government requirements
The use of public places such as parks, streets and sporting grounds is regulated by local government. If your organisation’s fundraising activities involve the use of a public place, you should check with your local council regarding its requirements.

If you would like electronic PDF copies of these two publications please send us an email with the words New ATO Tax Publications – Summit 2005 in the subject line to probono@probonoaustralia.com.au.