ATO Guide to the tax exemption
A guide provided by the ATO allows Clubs to self assess "if their club is exempt from income tax as a society, association or club established for the encouragement of a game or sport".
The starting point is that "If your club is not exempt from income tax, it is taxable". The guide goes on to say:
You should self-assess your club's status each year. You should also do this when there are major changes to your club's structure or activities.
It is also important that you review your club's status as part of your governance processes to ensure your club still meets the requirements for exemption.
You need to remember that income tax exemption is not necessarily permanent. The growth of your club, changes in its constitution, focus and activities can alter the character of your club.
SLOPES encourages all Clubs to read this Guide carefully and to take action on issues where necessary. SLOPES' view is that it is prudent to circulate the Guide - recognising that it represents the ATO's views on the tax status of sporting clubs. But clearly every case is dependent on the particular founding documents and the actual activities being conducted.
For more background, see this material issued by Clubs Australia:
SLOPES, of course, is not in a position to provide such expert advice: our role is to raise and emphasise the importance of the issues and encourage all Clubs to take a diligent and prudent approach to them. If in doubt please seek expert advice from your tax adviser.
SLOPES has appointed a Committee Member (Bill Coombes – firstname.lastname@example.org) to work on an encouragement program to promote and assist Clubs in their thinking.
We strongly recommend that each Club appoint one of its committee as their “Sports Encouragement’ Officer” to do the same.
On the Encouragement of Sports page there is a dedicated section with useful information and links to other organisations which can assist you to promote sport within your Club. Clubs actually do a lot to encourage sport but they often do not think about it that way – nor always do they keep records of their activities. Participation in The Perisher Cup is an example. As are the School Events Week and promotion of it in the Clubs. Many Clubs provide lodging for racers and accompanying families. Another example is recording the hours of ski and snowboard instructions – paid and unpaid – each week engaged in by lodge users: it is useful for weekly club captain’s reports to keep a record of these hours.