Not for Profit: Avoiding Fraud and Tax Concessions
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Transcript of Not for Profit: Avoiding Fraud and Tax Concessions
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NOTFORPROFITTAXATION&
AVOIDINGFRAUD
2- 3February2017
HillRogers| February2017
AssociationsForum– CEO&ChairSymposium,Brisbane
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AndrewLamTaxSpecialist– NotForProfitSector
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Notforprofittaxation
• Incometaxexemptions• GSTconcessions• FBTconcessions(rebateorexempt)• Payrolltaxconcessions• Stampdutyconcessions• Landtax• Localgovernmentconcessions(e.g.rates)• DGR(notstrictlyataxconcession)• Principle ofmutuality(notstrictlyataxconcession)
Keypoints:• Accesstoconcessions arenotautomatic.Somerequireself-assessmentorendorsement.• Regularlyreviewaccesstotaxconcessions
RecapoftaxconcessionforNFPs
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What’snew?
• FBTexemptCaps($31,177or$17,667)31March2017• FBTexemptCaps($30,000or$17,000)31March2018(consideradjustingsalary
packages)• FBTrebateof49%cappedat$31,17731March2017• FBTrebateof47%cappedat$30,00031March2018• Salarypackagedmealentertainmentandentertainment facility
leasingexpensebenefitscappedat$5,000
FBT
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Notforprofitstewardshipgroup
• Lastavailableminutes– 13July2016.• Lastmeeting– presumeNovember2016.• 45staffmembersintheATOworkingpredominantlyonNFPissues• ATOworkscloselywiththeACNC• NFPsarepartofthe“ReinventingtheATOprogram”.2016/17programmainlyrelatesto
makingtheirinformationeasiertounderstand.(https://www.ato.gov.au/uploadedFiles/Content/CR/downloads/Re-inventing/js37511%20EYC%202016-17_not-for-profit_w.pdf)
• ABNapplicationissueswithtimelinessresolved• BetterinformationexchangebetweenATOandACNCtoenableautomaticupdateofABN
lookup• Preparingaprofileofhigh-riskcases• Lookingattrainingorganisationsthathaveself-assessedasincometaxexempttoconsider
whethersomeshouldberegisteredascharitieswiththeACNC
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Responsibilities,RisksandOpportunities?
• Incometaxstatusshould beannuallyreviewedorwhenstructureoractivitieschange(non-charitiesandcharities)
• Don’tforgetrefundoffrankingcredits• ACNCreportinge.g.AnnualInformationStatements• WhattodoifyourorganisationispickedforanATOreview?• Isyourorganisationcharitable(notethatATOdefinitioncanbebroad)?
ü Professionalassociationsü Chambersofcommerceü Notforprofitagedcarehomesü Notforprofitchildcareü Scoutsassociationsü Universitiesandcollegesü Non-governmentschoolsü Guidedogsassociationü Disability serviceorganisations
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Whatresourcesarethere?Incometax• Incometaxguidefornon-profitorganisations• http://law.ato.gov.au/atolaw/view.htm?DocID=SAV/ITGNPO/00001• Incometaxstatusofself-assessorsshouldberegularlyreviewed(non-charities)• https://www.ato.gov.au/assets/0/104/1909/2003/bba2a60f-db06-4d61-9fef-
ec6ea0f0cea2.pdf• Incometaxstatusofcharitiesshouldberegularlyreviewed(charities)• https://www.ato.gov.au/assets/0/104/1909/2003/51a4ab21-5668-4211-bde1-
e1212bc7f65a.pdf
GST• https://www.ato.gov.au/Non-profit/Your-organisation/GST/GST-concessions/
FBTguideforemployers• https://www.ato.gov.au/general/fringe-benefits-tax-%28fbt%29/in-detail/employers-
guide/fbt---a-guide-for-employers/?page=1#Introduction
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Aboutme– AndrewLam
• Isacharteredtaxadviserandasolicitor• Hasworkedwithin leadingtaxationadvisory teamsinchartered
accounting firms(bothbig4andmid-tier)andatop-tierlawfirm• Hasdeepexperienceintaxationadvisorymatterswithaparticularfocusandinterest
inNFPswiththeirtaxationaffairs• Alsoprovides taxadviceinconnectionwithbusinesspurchaseandsalestransactions,
undertaking taxduediligenceassignments, structuring inbound andoutboundinvestmentsandgeneraltaxplanning.
• BachelorofCommerce/BachelorofLaws,MasterofLaws(Taxation)• ACharteredTaxAdvisor• [email protected] │m:0419293385
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VishalModiAuditSpecialist– NotForProfitSector
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AvoidingFraud
Thissessionwillcover:
• Howyoucanprotectyourorganisation
• Whyeffectiveinternalcontrolsareimportant
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“Atanygivenmoment, thereisacertainpercentageofthe
population that’suptonogood”
J.EdgarHooverDirectoroftheFederalBureauof
Investigation(FBI),USA
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Fraud
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MisappropriationofAssets
CorruptionFraudulentStatements
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FraudTriangle
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FraudTriangle
Incentives/Pressures
Opportunities Attitudes/Rationalisation
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Howyoucanprotectyourorganisation
Itisimportant thatyouconsider theseaspectsofyourorganisation:
• Ethicalculture
• Communication flow
• Formalpoliciesandprocedures
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Stepsforfraudprevention
• Beclearabouttheethicalvalues,e.g.honestyandaccountability– setthe“toneatthetop”onfraudulent behaviour
• Beopenaboutthepossibility (risk)offraud,evenifitisonlyasmall risk– ifyoudon’tacknowledgethatfraudhappens,youarenotgoingtofindit
• Identifythetypesoffraudyoumaybeatriskfrom– conductariskassessment
• Understand theredflags thatactasawarningofpossible issues– e.g.behaviouralorlifestylesymptoms, accounting&analyticalanomalies
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Preventfraudwithproperinternalcontrols
• Developsoundwrittenpoliciesandprocedures – important theyareclearaboutrolesandresponsibilities, andwhatstepsmustbetaken,including:
ü detailedandrobust financialprocedures, information technology &security
ü fraudpreventionpolicy
ü humanresourcesprocedures
• Promptly report anysuspectedfraudorothercriminalactivitythattakesplace,andtakestepstominimiseanylossandprevent itfromreoccurring
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Whyeffectiveinternalcontrolsareimportant
• Implementing effectiveinternalcontrols iscriticaltoreducing your organisation’s exposure tofraud risk
• Reviewingtheeffectivenessofinternal controlisanessentialpartoftheBoard’sresponsibilities; whilstmanagementisaccountabletotheBoardfordeveloping,operatingandmonitoring thesystemofinternalcontrolandforproviding assurancetotheBoardthatithasdoneso
• TheBoardcannotrelysolelyonaprocessofinternalcontrolembeddedwithintheorganisation’s operations, butshould regularlyreceiveand reviewreportsoninternalcontrol frommanagement
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Whyeffectiveinternalcontrolsareimportant
• Aswellasaregular review,doundertakeanannualassessment
• Riskmanagementandcontrolsarenottobeseenasaburdenonbusiness, ratherthemeansbywhichbusinessopportunitiesaremaximisedandpotential lossesassociatedwithunwantedeventsreduced
• Develop asuccessfulsystemofinternalcontrol thatisresponsivetochange
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Aboutme– VishalModi
• Expertiseinproviding commercialentitiesandmembership basedorganisationswithexpertadviceandguidancewiththeirassurancerequirements
• Focusedonbuilding strongpartnershipswithclients• Passionateabout advisingandimplementing efficientriskmanagementcontrolsand
affecting longtermsustainableimprovements inbusinessoutcomes• JoinedHillRogersin2005andappointedDirectorin2012• BachelorofCommerce• MemberofCharteredAccountantsAustraliaandNewZealand• RegisteredCompanyAuditor• [email protected] │m:0434129005
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t+61292325111f+61292337950www.hillrogers.com.au| [email protected]
Level5,1ChifleySquare,SydneyNSW2000 AustraliaGPOBox7066,SydneyNSW2001
H.R.P.HPtyLimitedpractisingasHillRogers|ABN12003718 518MemberofKSInternational,anassociationofglobal independentaccountingfirms.Liability limitedbyaschemeapprovedunderProfessional StandardsLegislation.
Disclaimer:HillRogers AdvisoryPtyLtdNone of the material contained in this publ ication is, or should be regardedas personal or f inancial product advice. Accordingly, no person should relyon any of the content s of th is publ ication without fi rst obtaining specificadvice from Hill Roger s. Every effort ha s been made to ensu re that thecontent is accurate,however it is not intended tobe a complete descript ionof the matters de scribed. Hil l Roger s, its Principa ls and agents accept norespons ibi lity to any person who acts or re lies in any way on any of thematerial without first obtaining such specific advice.
H.R.P.H Pty Limitedpractising asHill Rogers|ABN 12 003 718 518Member of Mor ison KSi, an association of global independent accountingfirms. Liability l imited by a scheme approved under Pr ofess ional Standard sLegislation.