The ATO has released tailored advice to help those in the NFP sector understand if they have obligations under the Common Reporting Standard (CRS). The CRS is the single global standard for the collection, reporting and exchange of financial account information on foreign tax residents. The implementation of the CRS commenced in Australia on 1 July 2017.
Under the CRS, many entities – including some NFP organisations – will be required to collect and report to the ATO financial account information on non-residents. The ATO will exchange this information with the participating tax authorities of those non-residents.
The ATO says NFPs could fall within a category required to report under the CRS if a significant proportion of their income is derived from investments.
The CRS requires Financial Institutions to collect and report Financial Account information on foreign tax residents (Reportable Accounts). Under the CRS some NFPs will be Financial Institutions and may have obligations to report to us. NFPs could be Financial Institutions by either having managed investments or by conducting an investment business.
Even if your NFP is not a Financial Institution it may be asked by other entities for self-certification. Self-certification will require a Financial Institution to ask all new (and some existing) Financial Account holders a series of questions about their residence and entity status for tax purposes. Where a self-certification shows that an Account Holder is from a foreign jurisdiction, the Financial Account will have to be reported to us.