ATO Charity Status Now Online
28 July 2005 at 1:07 pm
The ABN now displays the following information for endorsed charities:
– The charity type – charitable fund, charitable institution, public benevolent institution or health promotion charity,
– The tax concessions the charity is endorsed to access, and
– The date of effect of each endorsement.
Tax concessions disclosed on the ABR include:
– income tax exemption
– goods and services tax (GST) charity concessions
– fringe benefits tax (FBT) rebate, and
– FBT exemption.
From 1 July 2005, charities must be endorsed by the Tax Office to access charity concessions under FBT and GST laws.
The Tax Office has been processing applications on the Application for endorsement as a tax concession charity for twelve months now.
During this time, the ATO says a number of applications have been disallowed due to the applicant not providing necessary information to process the application. This includes applications that contain errors or are incomplete.
The ATO warns that if an endorsement application contains errors or is incomplete, it need to return it to the applicant for correction or completion.
There are time limits for providing further information to the Tax Office. They are set out in Practice Statement Law Administration PS LA 2003/4.
If you are required to provide further information in respect of your endorsement application, you should provide it within 28 days from the date we request the information from you.
The ATO says this timeframe may be extended where an organisation provides a reasonable explanation as to why it cannot provide the information within 28 days.
Explanations that will be considered reasonable include:
-the application concerns relatively complex matters,
-the applicant is reliant upon third parties to provide the information and cannot compel them to provide the information by a given date, or
-information must be obtained from overseas sources.
It says if all the information for endorsement as a tax concession charity is not received within these time limits, the application will be disallowed.
Below are some of the more common errors applicants are making when completing the charity endorsement application form.
1. Question 3 – selecting the wrong entity type or ticking multiple boxes
You should select the entity type that best describes your organisation. Place an ‘x’ in one box only on the application form.
To be one of the entity types listed at this question, your organisation must be a charity.
The characteristics of a charity are:
-it is an entity that is also a trust fund or an institution
-it exists for the public benefit or the relief of poverty
-its purposes are charitable within the legal sense of that term,
-it is non-profit, and
-its sole or dominant purpose is charitable.
For more information, see Instructions for endorsement as a tax concession charity (NAT 10652).
2. Question 9 – writing 100% instead of 0%
If your organisation’s purposes are wholly in Australia write ‘0%’. Otherwise, estimate how much of your activities and commitments are outside Australia.
3. Question 11 – selecting the wrong box and completing the name, address and date of endorsement details when the applicant is not a PBI employer
All organisations that are applying for endorsement must place an ‘x’ in one of the boxes at question 11.
If your organisation is applying for endorsement for a public benevolent institution (PBI) employer that it operates you should select ‘(b)’ and complete the name, address and date of endorsement details at this question.
For all other organisations applying for endorsement, select ‘(a)’. Do not complete the name, address and endorsement date details at this question. Go to question 12.
4. Questions 13 to 20 – failing to complete all questions
These questions are compulsory. The information requested is used to assist in determining an applicant’s endorsement entitlements.
If your organisation is applying for endorsement as a whole, complete the financial information details for the entity as a whole. If your organisation is applying for endorsement for a public benevolent institution (PBI) employer that it operates, answer questions 13 to 20 in relation to that PBI employer, not your organisation.
If your organisation does not complete questions 13 to 20, its application for endorsement as a tax concession charity can not be processed and the form will be returned for completion. This may result in delays in the processing of your organisation’s application for endorsement.
For more information on how to complete the Application for endorsement as a tax concession charity phone the non-profit infoline on 1300 130 248. Or go to www.abr.business.gov.au.