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MI Member Compliance Charity reform update Compliance with MI Member Standards Time for questions

MI Member Compliance Charity reform update Compliance with MI Member Standards Time for questions Please note: This seminar does not provide legal advice. NFP Reforms – Overview NFP Reforms – since 1995 15.5 Million words; 50,000 pages. Gov’t commissioned 3,000 reports.

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MI Member Compliance Charity reform update Compliance with MI Member Standards Time for questions

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  1. MI Member Compliance Charity reform update Compliance with MI Member Standards Time for questions Please note: This seminar does not provide legal advice

  2. NFP Reforms – Overview • NFP Reforms – since 1995 • 15.5 Million words; 50,000 pages. • Gov’t commissioned 3,000 reports. • NFP Sector – 4,500 responses; 29,000 pages • Prof Myles McGregor Lowndes – CMA Conference 2013

  3. NFP Reforms – Overview • ‘In Australia’ Legislation • ACNC Act • Statutory Definition of Charity • Governance Regulations • UBIT - scrapped

  4. Other Reforms impacting charities • A multitude of Federal and State/Territory laws including: • Privacy • OH & S • Working with children • Fundraising etc

  5. ACNC – Background • Charity Status determined by ATO • 3 December 2012 – ACNC became operative • Public information portal • Decider of charitable status but not tax concessions (ATO) • Minimum governance standards • Financial reporting framework • External conduct standards – not yet

  6. ACNC – Current obligations • Good Governance • Five governance standards • Ensure objects in constitution are consistent with mission statement and practice. • Annual Information Statement • Keep records • Update details – constitution, responsible persons etc

  7. ACNC – Future • To be abolished and replaced by Centre of Excellence • Options paper: • Self-reporting requirements – back to ASIC • Returning determination of charitable status to ATO • Charities required to maintain publically accessible website with names of responsible persons, details of all government funding, financial reports. • Nothing certain

  8. Statutory Definition of Charity • Charities Act passed in June 2013 & Commenced 1 Jan 2014 • Definition previously based on common law • Gives certainty to ‘Advancing Religion’ as a statutory Head of Charity • Codifies many other purposes as charitable

  9. “In Australia” Requirements - Background • The issues (1995): • Control of funds going off-shore – tax avoidance, anti-terrorism and money laundering. • International treaty obligations – regulate movement of money between countries. • Need to protect the integrity of charitable activity

  10. “In Australia” Requirements - Background • The Answer: • Taxation law used as a control mechanism • Taxation Laws Amendment Act (No 4) 1997 • Income tax exempt charities barred from sending funds overseas unless they meet certain conditions.

  11. “In Australia” Requirements - Current • To be endorsed by the ATO as income tax exempt, a charity must meet one of three tests: • “In Australia” test • Deductible Gift Recipient (DGR) test • Prescribed by law test • Missions Interlink and its Members are prescribed by law

  12. “In Australia” Requirements – Reform • The issues: • Law below treaty obligations • Word Investments case • Government announced in 09/10 budget that it would amend the “in Australia” Special Conditions for tax concessions to better control those organisations passing money to overseas charities and other entities.

  13. “In Australia” Requirements – Reform Process • July/August 2011 – first exposure draft & public consultation • April/May 2012 – second exposure draft & public consultation • August 2012 – Bill introduced to Parliament • June 2013 – Some of the provisions of 2012 Bill were enacted • August 2013 –2012 Bill lapsed at the dissolution of Parliament • December 2013 – Current Government announced it would proceed with reforming the “in Australia” requirements • March 2014 – new exposure draft & public consultation

  14. “In Australia” Requirements – Proposed • The restated “in Australia” special conditions move away from expenditure-based test to allow consideration of a wide range of circumstances. • “Tracing” of money given to another enitity. • Stricter conditions on “disregarded amounts”. • Much more difficult and greater compliance required for organisations with overseas activities to meet “in Australia” conditions.

  15. “In Australia” Requirements – Proposed • The exposure draft maintains the existing prescription of Missions Interlink and its Members, exempting them from the new “in Australia” requirements for income tax entities. • Wait and see……

  16. Exempt Foreign Income – personal income tax • The issue (2009): • Australians earning large sums of money overseas not subject to Australian income tax. • “Better targeting the income tax exemption for Australians working overseas”. • Changes to Section 23AG of the Income Tax Assessment Act 1936 effective 2009/2010.

  17. Exempt Foreign Income – personal income tax • Section 23AG: • Foreign income of personnel (Australian residents for income tax) • working continuously overseas for more than 91 days is exempt from Australian income tax if directly attributable to activities of a prescribed institution exempt from Australian income tax because it is pursuing objectives outside Australia. • Personnel of MI Accredited Members fit this exemption. • Income to be declared as “exempt foreign income”.

  18. Missions Interlink Member • Compliance with MI Standards • Missions Interlink Standards Statement • Missions Interlink Member Accreditation Standards • MI Member log-in to www.missionsinterlink.org.au • Username: missions Password: Psalm145

  19. Missions Interlink Member • Compliance with MI Standards • Missions Interlink Standards Statement • MI Member log-in to www.missionsinterlink.org.au • Username: missions Password: Psalm145

  20. Missions Interlink Member • Compliance with MI Standards • Missions Interlink Member Accreditation Standards • MI Member log-in to www.missionsinterlink.org.au • Username: missions Password: Psalm145

  21. Missions Interlink • Member Accreditation Standards • 1. An Australian organisation • MI Member log-in to www.missionsinterlink.org.au • Username: missions Password: Psalm145

  22. Missions Interlink • Member Accreditation Standards • 2. Financial Standards • MI Member log-in to www.missionsinterlink.org.au • Username: missions Password: Psalm145

  23. Missions Interlink • Member Accreditation Standards • 3. Governance and Accountability Structure • MI Member log-in to www.missionsinterlink.org.au • Username: missions Password: Psalm145

  24. Missions Interlink • Member Accreditation Standards • 4. Tax Status • MI Member log-in to www.missionsinterlink.org.au • Username: missions Password: Psalm145

  25. Missions Interlink • Member Accreditation Standards • 5. Accreditation Confirmation • MI Member log-in to www.missionsinterlink.org.au • Username: missions Password: Psalm145

  26. Missions Interlink • Member Accreditation Renewal • 2014 Member Declaration • Use web link in renewal letter

  27. Questions

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