This Commissioner’s Policy Statement is issued under the authority of the Commissioner and should be read together with the ACNC Policy Framework, which sets out the scope, content and definitions common to our policies.
- This Commissioner’s Policy Statement outlines the process by which the Commissioner will apply administrative penalties to registered charities that fail to lodge documents on time under Subdivisions 175-C and 175-D of the Australian Charities and Not-for-profits Commission Act 2013 (Cth) (ACNC Act).
- This policy does not cover administrative penalties applied in the case of charities making false or misleading statements to the Commissioner. The policy statement outlining the Commissioner’s approach to those penalties is Commissioner’s Policy Statement 2015/02: Penalties for false or misleading statements.
- Under section 175-35 of the ACNC Act, all registered charities are liable to pay an administrative penalty if they fail to provide to the Commissioner, by the due date and in the approved form, any document that they are required by the ACNC Act to provide to the Commissioner.
- The ACNC relies on charities providing required documents in a timely manner. Failure to do so reduces the transparency and integrity of the Charity Register, and risks undermining public trust and confidence in the sector. The penalty provisions encourage charities to meet their reporting and notification obligations.
- Each year, all registered charities must lodge an Annual Information Statement within six months of the end of the charity’s accounting period. The default accounting period ends on 30 June, but charities can apply to the Commissioner to approve a different accounting period under section 60-85 of the ACNC Act. Some charities may use a substituted accounting period, but their Annual Information Statement must still lodged within six months of the end of that period.
- Charities must use the approved form to notify the ACNC of certain changes to their circumstances or details (ie: changes to the charity’s name, Address For Service, Responsible Persons, and governing documents), as well as some contraventions or non-compliance with the ACNC Act. For more information about this obligation, see Commissioner’s Policy Statement 2013/02 – Duty to Notify.
- Where notification is required in an approved form, but this form is not submitted within the required time, the penalty for failing to lodge documents on time can also apply.
- In some circumstances, a charity’s failure to lodge documents when required can be grounds for the ACNC to revoke that charity's registration (subparagraph 35-10(1)(c)(i) of the ACNC Act). The Commissioner’s approach to the revocation of charity registration is addressed in Commissioner’s Policy Statement 2014/03: Revocation by the ACNC.
- The Commissioner may use his or her discretion to defer the due date for lodgement of documents under section 190-15 of the ACNC Act. This can include the lodgement of the Annual Information Statement. Deferrals may be granted to certain classes of charities, or to individual charities. To request a deferral, charities should email email@example.com. Where a deferral has been granted, the deferred date becomes the deadline by which documents must be lodged for the purposes of the ACNC Act.
Penalties for late lodgement of documents
- Charities that fail to lodge their Annual Information Statement by the relevant due date are liable to pay a penalty. Charities are also liable for a penalty if they fail to notify the ACNC - in the required time and by using the approved form - of changes to their circumstances or details, or of some contraventions or non-compliance with the ACNC Act.
- The penalty amount that applies depends on a charity's size (see sections 175-40 and 205-25 of the ACNC Act). It is calculated by reference to the ‘base penalty amount’. The 'base penalty amount' is increased for every 28 days (or part of) that the document remains unsubmitted.
- The 'base penalty amount' is calculated by multiplying one penalty unit by the number of 28-day periods (or part of) that the document is overdue (up to a maximum of five penalty units). For example, where a charity lodges a document 31 days late, the 'base penalty amount' would be two penalty units: one unit for the first 28 days, and one penalty unit for the subsequent part of 28 days (three days).
- To calculate the penalty amount payable, the 'base penalty amount' is then multiplied by one, two or five depending on whether the charity is small, medium or large respectively. The value of a penalty unit is set by section 4AA of the Crimes Act 1914 (Cth), and is subject to change.
- If a charity does not submit the required document because it is no longer operating (and therefore not entitled to registration), the ACNC may revoke its registration under section 35-10 of the ACNC Act (see Commissioner’s Policy Statement 2014/03: Revocation by the ACNC).
- Penalties become due for payment only once the Commissioner has given written notice of a charity’s liability to pay the penalty. This notice will specify the penalty amount, the reasons why it applies and the due date for payment. The due date must be at least 14 days after the date of the notice.
- While the ACNC must calculate and communicate penalties, the ATO collects them. The ATO will treat the penalty as a primary tax debt, and may take action to recover the debt if it is not paid. The general interest charge will apply to any penalties that are not paid by their due date (irrespective of whether the charity has requested the penalty be remitted).
Who must pay the penalty?
- A registered charity that fails to provide a document in the approved form by its due date is liable to pay the administrative penalty (sections 175-35, 60-5 and 60-10 of the ACNC Act).
- And in some circumstances a charity's Responsible Persons can be responsible for meeting the charity’s liabilities under Division 180 of the ACNC Act.
- The directors (including committee members) of an unincorporated association or body of persons are jointly and severally liable and may be required to pay the penalty amount in full or part. Directors may choose to split the payment equally, one director may pay the entire penalty, or each director may pay a percentage of the penalty. However, until full payment is made, each director remains liable for the outstanding amount.
- For charities that are trusts, each of the trustees are jointly and severally liable to pay the penalty. If any of the trust’s trustees is a corporate trustee, the directors of the corporate trustee are also jointly and severally liable if the late lodgement arose from a deliberate act or omission of the director that involved dishonesty, gross negligence or recklessness.
- In the case of charities that are bodies corporate (such as companies or incorporated associations), the directors of the charity are also jointly and severally liable (with the charity) if the late lodgement arose from a deliberate act or omission of the director that involved dishonesty, gross negligence or recklessness.
Remission of penalties
- The Commissioner has the discretion to remit all or part of an administrative penalty that arises due to a failure to lodge documents on time, as outlined in section 175-60 of the ACNC Act
- Penalties for late lodgement of documents will generally be applied in a way that influences other charities to submit in a timely way.
- Where a penalty has been imposed for failing to lodge documents on time, the Commissioner will take a risk-based approach to any decision about remission of all or part of the penalty. This is consistent with the ACNC Regulatory Approach.
- The Commissioner will consider the potential harm of any continued non-compliance (including the contexts of broader public trust and confidence, and the need to maintain the integrity of the Register) as well as a charity’s circumstances (its risk profile, resources and past behaviour, for example).
- The Commissioner will consider a number of factors in deciding whether to remit a penalty in part or in full. These include, but are not limited to:
- any extenuating circumstances that caused the late lodgement to occur, or any special circumstances that make it fair and reasonable to remit the penalty;
- whether the ACNC became aware of the late lodgement as a result of the charity’s voluntary disclosure;
- the charity’s compliance history; and
- whether the charity has subsequently lodged the outstanding documents.
- For the purposes of penalty remission, the ACNC considers 'extenuating circumstances' to be those outside a charity's control, and which had a significant impact on a charity’s ability to meet its reporting obligations. For example, natural disasters may genuinely affect a charity’s ability to comply, and warrant remission of penalties.
- The ACNC is unlikely to consider as 'extenuating circumstances' a charity's inability to lodge the document due to being busy or having a change in staff. Similarly, a failure to receive reminders from the ACNC (when reminders had been sent to a charity’s Address For Service) would not ordinarily be considered an extenuating circumstance – the onus is on charities to provide us with a current Address for Service.
- The weight given to a charity’s compliance history depends on all the circumstances. A good compliance history will not give rise to an automatic remission of penalties. Rather, the ACNC will consider a charity's behaviour in relation to the reasons behind its failure to lodge on time (such as intentional disregard or lack of reasonable care). The Commissioner will be less likely to remit all or part of a penalty if a charity has a poor compliance history.
- The amount of the administrative penalty varies for charities depending on their size: small, medium or large. A charity’s size is based on its revenue for the reporting period. If a medium or large charity reduces in size since its last reporting period, the Commissioner will consider partially remitting the penalty amount to that applicable to a charity's present size.
- A charity can object to any ACNC decision either not to remit - or only partially remit - its penalty for failing to lodge documents on time. A charity may object within 60 days of the penalty notice being served, and only when the outstanding penalty amount is more than 2 penalty units).
- If the objection is disallowed, a charity may apply to the AAT for review or appeal to a court. For more information, see Commissioner’s Policy Statement 2012/04: Reviews and Appeals.
- Australian Charities and Not-for-profits Commission Act 2012
- Australian Charities and Not-for-profits Commission Regulation 2013
- ACNC regulatory approach
- Commissioner’s Policy Statement 2013/02: Annual Information Statements
- Commissioner’s Policy Statement 2013/03: Duty to notify – transitional policy
- Commissioner’s Policy Statement 2012/09: Voluntary revocation
- Commissioner’s Policy Statement 2014/03: Revocation by the ACNC
- Commissioner’s Policy Statement 2012/04: Review and appeals