Law Changes for Incorporated Groups

  1. Income tax reporting for not-for-profit organisations.
  2. Disclosing Remuneration and other benefits for Incorporated groups
  3. Grievance Procedures for Incorporated Groups
  4. Financial Reporting (July 2023)

The Australian Tax Office (ATO) Income tax reporting for not-for-profit organisations.

The ATO has made changes to income tax reporting for not-for-profit organisations. From the 2023-24 income year, non-charitable not-for-profits (NFP) with an active ABN need to lodge an annual return. Read more from the ATO

This is a complex issue, and understandably, some QWaLC member groups are feeling overwhelmed and not sure where to begin. Our colleagues at Landcare Victoria have been leading the way in helping groups navigate these new rules. QWaLC would like to acknowledge Landcare Victoria for allowing us to use and adapt where necessary these resources to meet the needs of our Queensland groups who are incorporated under the Queensland Government Department of Justice.  See resources below.

Dept of Justice changes for Incorporated associations in QLD.

The final suite of changes from the Associations Incorporation and Other Legislation Amendment Act 2020  have now begun.

Your association must:

  1. disclose remuneration paid and any benefits given to committee members, senior staff and their relatives at your Annual General Meeting
  2. follow the model rules to resolve disputes or a create a compliant grievance procedure in your constitution.

These changes will help improve transparency and accountability in your association.

If you have any questions about the changes, you can email the Queensland Department of Justice at Fair.Trading@justice.qld.gov.au or phone 13 QGOV (13 74 68).    

1) Income tax reporting for not-for-profit organisations

If your group/network has an active ABN (or may need one) and is not already a registered charity with the ACNC, please read the first guidance note and review your organisation’s income tax status as a matter of priority. Once you know how the ATO classifies your organisation and what your options are, you will be able to move forward.

RESOURCES
1 Landcare Victoria Inc – Guidance note – Review your organisation’s income tax status_QWALC (READ THIS FIRST)
Review your organisation’s tax status and determine if these changes apply to you. For organisations within the scope of the new reporting requirements, this guide will assist you to understand your options in regard to tax exemptions and reporting. A flowchart has been included to help simplify this rather complicated process.
2 Landcare Victoria Inc – Guidance note – Preparing for charity registration_QWaLC (including notes from QWaLC)
After undertaking a review of your organisation’s income tax status, you may determine charity registration is the best path to take. If so, please refer to this guidance note before attempting the ACNC registration form, as any missing or incorrect information will delay the application process.
3 Landcare Victoria Inc – Your questions answered – Income tax and charity registration_QWaLC
This document addresses frequently asked questions arising from the income tax reporting changes. If you’ve read both guidance notes and have further questions, you may find the answers here.
4 Landcare Victoria & ACNC Webinar Slides – Income tax reporting and charity registration (2 May 2024)
If you were unable to attend the Landcare Vic webinar with the ACNC or want to double check any information presented on screen, please refer to the attached webinar slides.
Note: The ACNC slides advise the dissolution clause in your governing document “must state that the assets go to another charity”. The ACNC is using the legal definition of ‘charity’ here – basically, an NFP with charitable purposes. If your organisation uses the Model Rules, please be assured the dissolution clause within is already compliant and does not need to be amended prior to charity registration.
5. Webinar recording
If you were unable to attend the Landcare Vic webinar with the ACNC or want to re-watch it, the recording is available to stream on YouTube.
6. ACNC Charity Registration Self Assessment Tool 
The Australian Charities and Not-for-profits Commission (ACNC) has released a new tool designed to make charity registration and compliance easier.

Note: Landcare Victoria and Queensland Water and Land Carers have compiled this information from various publicly available sources including the ATO, ACNC, NFP Law and the relevant legislation (the Income Tax Assessment Act and the Charities Act), and made an assessment about how this issue could impact environmental volunteer organisations based on our knowledge of our own Member Groups. Advice from Landcare Victoria Inc or Queensland Water and Land Carers Inc is not legal advice or financial advice and should be taken as general guidance only – it may not apply to your organisation specifically.

We will do our best to help members through this, but ask that you direct any specific tax-related queries not covered in this information pack to the ATO’s NFP Advice Service (1300 130 248) or your registered NFP tax agent/accountant. Specific charity registration queries may be best answered by the ACNC (13 22 62).

2) Disclosing Remuneration and other benefits

From 1 July 2024 incorporated associations in Queensland will need to disclose remuneration and other benefits at their annual general meeting (AGM), even if the amount to report is zero.

This applies to remuneration and benefits given to:

  • management committee members
  • senior staff, including people who
    • help make decisions that affect all or a significant part of the association’s activities, or
    • have the capacity to significantly affect the association’s financial position
  • their relatives, including
    • spouse
    • parent
    • sibling
    • child
    • grandparent
    • grandchild.

All incorporated associations—including those registered with the Australian Charities and Not-for-profits Commission (ACNC) — must make this disclosure to members.

3) Grievance Procedures

You won’t need to make any changes to your constitution if you:

  • already have a compliant grievance procedure in your constitution
  • wish to follow the model rules’ grievance procedure – it will automatically apply.

If you wish to create a grievance procedure for use from 1 July 2024, you should submit your amended constitution to the Office of Fair Trading.

Find out how to create a compliant grievance procedure and change your association’s constitution.

More information

For information on how to get ready for the changes, visit Getting ready for the July 2024 changes.

For more information on remuneration disclosure, visit Disclosing remuneration and other benefits.

If you have any questions, contact Fair.Trading@justice.qld.gov.au or phone
13 QGOV (13 74 68).    

Changes that started on 1 July 2023

Red tape cut for more than 20,000 Queensland clubs and community groups

More than 20,000 Queensland incorporated associations will save time and money due to changes to their financial reporting thresholds that began on 1 July 2023.

The changes, which were made in consultation with the sector, have increased the level of assets an association can hold and the revenue it can receive without having to engage a registered auditor to review its financial statements, and created new revenue-based reporting rules for charities.

Financial reporting thresholds

Reporting thresholds for non-exempt associations have changed, meaning your association classification may have changed.

  • Large associations (previously Level 1)—from current assets or revenue of more than $100,000 to either
    • current assets of more than $1 million
    • total revenue of more than $500,000
  • Medium associations (previously Level 2)—from current assets or total revenue between $20,000 and $100,000 to either
    • current assets between $300,000 and $1 million
    • total revenue between $150,000 and $500,000
  • Small associations (previously Level3)—from current assets or revenue less than $20,000 to current assets of less than $300,000 and total revenue of less than $150,000.

Financial reporting requirements for charities

Financial reporting requirements for non-exempt charities have changed.

Learn about the new reporting requirements for charities and fundraising .

If your association is also registered as a charity, you may no longer need to have your financial records audited under the Collections Act 1966.

The new reporting rules for charities are set out below and apply to charities that are not exempt from reporting to the Office of Fair Trading.