Article

Eligibility ‘ Recent Developments at a Glance: February 2017

This article alerts you to some NFP sector- related developments over the past month. It deals with matters which have a more specialist nature or matters requiring only brief comment. There is material on accounting standards, Activity Statements, AUSkey, Fuel Tax, Fundraising etc.

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(1) Service Concession Arrangements: Grantors – draft AASB Standard

The Australian Accounting Standards Board has issued a draft AASB standard Service Concession Arrangements: Grantors (Fatal-Flaw Review Version) (the Draft). The AASB seeks comments by 14 March 2017.

The objective of the draft Standard is to prescribe the accounting for a service concession arrangement by a grantor that is a public sector entity.

A service concession arrangement is defined in Appendix A of the Draft:

‘A contract between a grantor and an operator in which:

(a)   the operator has the right of access to the service concession asset to provide public services on behalf of the grantor for a specified period of time; and

(b)   the operator is compensated for its services over the period of the service concession arrangement.’

A service concession asset is:

‘An asset used by the operator to provide public services on behalf of the grantor in a service concession arrangement that:

(a)   the operator constructs or develops, or acquires from a third party or is an existing asset of the operator; or

(b)   is an existing asset of the grantor or an upgrade to an existing asset of the grantor.’

A high level introductory overview is available on the AASB website.

The AASB notes that the final Standard is expected to be released in May 2017. It is to be effective from 1 January 2019, with earlier application permitted.

(2) The ATO’s Expectations of the NFP Sector
(and, conversely, what the NFP Sector can expect from the ATO)

The ATO has set out its expectations of the NFP Sector in relation to tax matters and conversely what the NFP Sector can expect of the ATO.

It has also outlined how it detects and deals with organisations that ‘do not do the right thing’. In particular, the ATO notes that the following aspects of the activities of charities and deductible gift recipients attract its attention:

  • not applying income and assets solely for the purpose for which the organisation is established, for example private benefits to individuals;
  • making incorrect claims for franking credit refunds; or
  • incorrectly advertising that donations to an organisation are tax deductible when the organisation is not endorsed as a deductible gift recipient.

(3) Nil Activity Statements must still be lodged

The ATO has noted that ‘failure to lodge an activity statement, even one with zero obligations, may delay processing and result in penalties’.  This applies to all periods.

(4) AUSkey Access – Changes to Firefox

The ATO has advised:

‘From 7 March 2017, the latest version of Mozilla Firefox (version 52) will not support AUSkey. A browser extension is now available for Windows users to access services that require an AUSkey in preparation for the Firefox upgrade. Mac users will need to change browsers, for example Google Chrome, with the Chrome browser extension.’

The ATO website provides detailed information on what you need to do, including a link for downloading the browser extension mentioned above.

(5) AUSkey Security

The ATO has issued the following alert:

‘We have detected criminal activity where identity thieves have fraudulently obtained AUSkeys linked to businesses. They have used these to access the portals, lodge activity statements and change account details for refunds.

We were able to take preventative action quickly. These AUSkeys have been cancelled and we are working with the affected businesses to protect their online security and monitor activity on their accounts.

To help protect your practice from identity theft, we recommend you take the following steps:

  • use Access Manager regularly to check people’s level of access to the portals is appropriate
  • cancel AUSkeys (in AUSkey Manager) for people who no longer work for you
  • immediately disable or remove a person’s account if you have any concerns about their activities
  • ensure that each person who deals with us online on behalf of your practice has their own AUSkey
  • keep passwords secure – they must not be shared
  • report any unknown or suspicious AUSkeys by phoning 1300 287 539 between 8.00am and 6.00pm, Monday to Friday.’

(6) Fuel Tax credits changes – need to check correct rate applied

Fuel tax credit rates increased for fuel acquired from 1 February 2017 – more information is available.

Detailed information on rates is available on the ATO website.

(7) Fundraising – Compliance with State/Territory Legislation

While Commonwealth legislation governs access to Commonwealth tax concessions for charities (including the ability of an organisation to obtain gift deductible fund status), State and Territory legislation affects the ability to raise funds sought for charitable purposes.

The ACNC has compiled a series of facts sheets (one for each State and Territory) directing charities to State and Territory legislative requirements with respect to fundraising.

Disclaimer: Information provided in this article, while correct at time of publishing, is subject to change.