The charity must:
- comply with all the substantive requirements in its governing rules; and
- apply its income and assets solely for the purpose for which the entity is established.
These conditions are significant because non-compliance results in the loss of income tax exemption for a period of time.
Boards and committees of management of charities need to be periodically assessing whether their organisations are still entitled to the tax concessions they have been granted. We recommend reading through the ruling and its examples to help make these assessments. Search for TR 2015/1 on the ATO website or contact us for a copy.