Private ruling: Scientific institutions
Published: July 2012
Ruling period: Question 1 | Year ended 30 June 2012 | Year ended 30 June 2013 | Year ended 30 June 2014 | Year ended 30 June 2015 | Question 2 | Year ended 31 March 2012 | Year ended 31 March 2013 | Year ended 31 March 2014 | Year ended 31 March 2015
Date scheme commenced: After 30 June 2010

Ruling: Q1: Does the entity qualify for exemption from income tax on the basis it is a non-profit scientific institution under item 1.3 in section 50-5 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes | Q2: Does the entity qualify as a rebatable employer on the basis it is a scientific institution under section 65J of the Fringe Benefits Assessment Act 1986 (FBTAA)? | A2: Yes

Relevant facts and circumstances: The entity in seeking the ruling provided a copy of its Constitution and copy of contracts that detail the work and activities it will undertake to achieve its objects.

Relevant legislative provisions: ITAA 1997 section 50-1 | ITAA 1997 section 50-5 | ITAA 1997 section 50-55 | FBTAA section 65J

Reasons for decision: Summary: The entity is a scientific institution who satisfies the special condition under section 50-55 of the ITAA 1997. As such its ordinary and statutory income is exempt under section 50-1 of the ITAA 1997. | Detailed Reasoning - Detailed reasoning: Section 50-1 of the ITAA 1997 exempts the ordinary and statutory incomes of any of the entities covered by one of the tables in Subdivision 50-A of the ITAA 1997. Item 1.3 of the table contained in section 50-5 of the ITAA 1997 covers 'scientific institutions' providing that section 50-55 of the ITAA 1997 is also satisfied. The Income tax guide for non-profit organisations (NAT 7967) describes a scientific institution as: Scientific institutions are set up and operated primarily to advance science. Common ways of advancing science include research, exploration and teaching. Disseminating information will often be involved. Scientific institutions do not include: · organisations run for the profit of their individual owners or members · professional associations primarily run for the professional or business interests of their members. Therefore in following this description, for the Commissioner to accept that the entity is a scientific institution it must: · be an institution · been set up and operated primarily to advance science · is not run for the profit of their individual owners or members · is not a professional association; and · satisfies section 50-55 of the ITAA 1997. The information provided by the entity being its Constitution and contracts with other parties which shows the work it performs demonstrate that all the above conditions are satisfied. However without specifically quoting from these agreements we cannot elaborate on how these conditions are met. | Summary: The entity is a scientific institution that is not an institution of the Commonwealth, a State or Territory and is therefore a rebatable employer under section 65J of the FBTAA. | Detailed Reasoning - Detailed reasoning: Section 65J of the FBTAA provides for a rebate of tax for certain entities. This includes scientific institutions. Although we have concluded the entity is a scientific institution the rebate does not apply to an institution of the Commonwealth, a State or Territory. In respect of an institution of the Commonwealth, a State or Territory subsection 65J(3) of the FBTAA has an extended meaning and it states: For the purposes of this section, an institution established by a law of the Commonwealth, a State or a Territory is taken to be an institution of the Commonwealth, the State or the Territory, as the case requires. In this case the entity was established via its constituent documents and not through a law so the extended meaning has no application. The documents provided also demonstrate that the entity is not an institution of the Commonwealth, a State or Territory.

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