Private ruling: Private Ruling - Income Tax - Exemption from Income Tax
Published: May 2013
Ruling period: Year ending: 30 June 2014 | Year ending: 30 June 2015 | Year ending: 30 June 2016 | Year ending: 30 June 2017 | Year ending: 30 June 2018
Date scheme commenced: 1 July 2013

Ruling: Q1: Is the income of the entity exempt from income tax pursuant to section 50-1 of the Income Tax Assessment Act 1997 (ITAA 1997) on the basis that it is an entity described in item 3.2 in the table in section 50-15 of the ITAA 1997? | A1: Yes.

Relevant facts and circumstances: The entity is seeking a ruling to extend the period of a ruling previously granted by the Commissioner of Taxation regarding its income tax liability. The information provided indicates the entity's objectives and purposes have not altered in any material sense since the previous ruling was issued.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 50-1. | Income Tax Assessment Act 1997 section 50-15.

Reasons for decision: Summary: A trade union is not defined in the legislation. Hence the ordinary meaning, which is the dictionary meaning, has been adopted by the Courts. It is accepted that the entity's members are employed and they can be described as workers. The entity is engaged in representing their conditions and terms of employment, which further supports their status as workers/employees. In the Trade Unions Act 1958 the term 'trade union' is defined as 'any combination whether temporary or permanent for regulating the relations between workmen and employers or between workmen and workmen or between employers and employers or for imposing restrictive conditions on the conduct of any trade or business......' The entity under consideration has been established primarily for the protection of its members and the terms and conditions of their employment with their clubs. It is the collective voice of its members, in determining their interests as employees. The entity actively implements its aims by negotiating the Collective Bargaining Agreements with the relevant body. It is considered that these aims and activities confirm that the entity is a trade union, as that term is ordinarily understood. The entity is an incorporated association pursuant to the Associations Incorporation Reform Act 2012 (Vic). Finally, the entity is located in Australia, and is unlikely to undertake its activities outside Australia. Therefore, the income of the entity would be exempt as the income of a trade union, which satisfies the special conditions set out in item 3.2 of the table in section 50-15 of the ITAA 1997.