QLS welcomes Senate NFP final tax report

The Queensland Law Society welcomes recommendations in the Senate’s Economics References Committee Not-for-profit entities – Tax Assessments final report which was tabled on 31 October.

QLS representatives Emeritus Professor Myles McGregor-Lowndes, member of the Not for Profit Law Committee, and Wendy Devine, QLS Manager Legal Policy, presented the committee with the Society’s concerns during the public hearing on 22 October.

The Society was concerned the proposed tax self-assessment for non-for-profit entities would impose undue compliance costs on organisations and significant administrative burdens on small NFPs.

The report acknowledged the QLS and Law Council of Australia’s submissions and has also recommended significant changes to the implementation process reflecting or consistent with positions of both organisations.

“The Queensland Law Society (QLS) submitted that the regulation is ‘not proportionate to the mischief’ and agreed that imposing the measure will place ‘undue compliance costs’ on NFPs. QLS argued that the majority of the targeted NFPs are small organisations with minimal employees and volunteer committee management,” the report stated.

The committee recommends the Australian Government introduce thresholds that exempt smaller, low-risk not-for-profit entities from completing the self-review assessment, capturing only those with a turnover above a certain amount.

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It also recommended the Australian Taxation Office extend the deadline for the return of the not-for-profit self-review assessment beyond 31 March 2025.

“Not-for-profit organisations play a key role in providing services throughout Australia. The introduction of self-assessed tax-exempt requirements will have wide-ranging effects on the administration of these predominantly volunteer-based groups,” the report stated.

“For some groups, the additional time required to administer the changes could be threatening to the long-term viability of the organisation. For others, the changes have come as a surprise and there are concerns over the Australian Taxation Office’s (ATO) suitability in implementing the changes.”

The committee also recommended the Australian Government explores the appropriateness and/or practicality of the Australian Charities and Not-for-profits Commission managing the self-review assessment regime in place of the ATO.

Eighteen submissions were accepted and are available on the committee’s website.

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