P&Cs and the Tax System  

Register for an Australian Business Number (ABN) P&Cs must register for an ABN, because this is required before they can apply for endorsement as an income tax exempt charity (ITEC).

How to Register
http://ato.gov.au/nonprofit/ and follow the links.
Generally, one ABN would cover all of the activities of the P&C, including fund raising, operation of a canteen, child care, recreation programs and so on.  

Apply for endorsement as an ITEC All P&Cs should apply for endorsement as an ITEC. A form is available for this purpose from the Australian Taxation Office, once the P&C has registered for an ABN.   If endorsement is not obtained, the P&C will be liable for income tax.  

Apply for endorsement as a deductible gift recipient (DGR) for building funds and library funds, if relevant Endorsement must be obtained for tax deductible library and building funds. A form is available for this purpose from the ATO, once the P&C has registered for an ABN.   Eligibility requirements are stricter than in the past.  

Consider GST options Generally, unless their circumstances make it compulsory to do so, the best option for small to medium P&Cs is not to register for GST.  

Lodge Instalment Activity Statement (IAS) / Business Activity Statement (BAS) Many P&Cs will need to lodge either an IAS or a BAS on a monthly or quarterly basis (together with any relevant payment). The relevant form(s) will be sent out by the ATO — the IAS applies where the P&C is not registered for GST, and the BAS applies where the P&C is registered for GST.   As well as reporting GST details (where relevant), P&Cs will need to report details of their PAYG (pay as you go) witholding amounts on these forms (including tax withheld from employees' wages and salaries).   In some cases, neither form may be needed. For example, P&Cs which are not registered for GST and which have no employees may not be required to complete a form. Further advice should be sought from the ATO.  

Become familiar with other tax requirements P&Cs, particularly those with employees, have a number of other tax responsibilities. For example, they must deal with tax file number declarations and withholding declarations, report to the ATO on certain matters, and provide payment summaries (similar to group certificates under the old PAYE system) to employees.   Where registered for GST, P&Cs may need to withhold payments from suppliers in some circumstances.  

Further information ATO business tax reform infoline: 13 24 78 ATO Website: http://ato.gov.au/nonprofit/