When the proposed amendments to the constitution are made, will the Company remain entitled to an exemption from income tax as a society or association established for the purposes of promoting the development of Australia's industrial resources in accordance with items 8.2(C) of table 50-40 of ITAA 1997?
Yes This ruling applies for the following periods : Year ending 30 June 20XX Year ending 30 June 20XX Year ending 30 June 20XX Year ending 30 June 20XX Year ending 30 June 20XX The scheme commenced on: 1 July 20XX
The Commissioner has previously ruled that the Company is exempt from income tax. The Company was established by participants in an industry. The objects of the Company are to fund research into an industrial resource. The Company funds the research by collecting funds from participants in the industry (Industry Participants). The funds collected by the Company for research become the property of the Company and can only be used for the purposes of research. The Industry Participants are members and non-members of the Company. The Industry Participants receive non-monetary benefits from the research funded by the Company as a consequence of providing funds. The Constitution of the Company contains clauses that prohibit the distribution of income and property to members and requires that the income and property is only applied towards the promotion of its objects. The Company recently entered into a Funding Agreement to fund the Project. Under the Funding Agreement, the Company receives intellectual property (IP) rights, and rights to commercial exploitation of IP from the Project.
The Industry Participants also received IP rights and other rights but have no rights to commercially exploit the IP from the Project. The Company is unlikely to use the IP rights from the Project. The Company is unlikely to commercially exploit the IP from the Project. The Company is also currently funding other projects or is in discussions to fund other projects.
Section 50-1 of the Income Tax Assessment Act 1997 Section 50-40 of the Income Tax Assessment Act 1997 Section 50-47 of the Income Tax Assessment Act 1997 Detailed reasoning Section 50-1 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the ordinary and statutory income of the entities covered by the tables in Division 50 is exempt from income tax. To be an exempt entity under item 8.2(c) of the table in section 50-40 of the ITAA 1997 an entity must be a society or association established for the purpose of promoting the development of Australian industrial resources. The society or association must also not be carried on for the profit or gain of its individual members and must satisfy the special condition in section 50-47 of the ITAA 1997. Society or association The terms