Commissioner's Policy Statement: Penalties for failing to lodge documents on time

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.

Policy Statement

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 Subdivision 175-C of the Australian Charities and Not-for-profits Commission Act 2013 (Cth) (ACNC Act).
This policy does not cover the application of administrative penalties in the case of false or misleading statements. The policy statement outlining the Commissioner’s approach to these penalties is Commissioner’s Policy Statement 2015/02: Penalties for false or misleading statements.

Legislative context

Under section 175-35 of the ACNC Act, all registered charities are liable to pay an administrative penalty if they fail to provide a report, return, notice, statement or other document to the Commissioner in the approved form by the due date.
The ACNC relies on charities providing required documents in a timely manner. When a charity fails to report on time, it reduces the transparency and integrity of the Charity Register, and risks undermining public trust and confidence. The penalty provisions encourage charities to ensure they meet their reporting and notification obligations.
Currently, all registered charities are required to lodge an Annual Information Statement within six months of the end of the charity’s accounting period, each year. 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.
Charities must notify the ACNC in the approved form about certain changes to their circumstances or details (namely, changes to the charity’s name, Address For Service, Responsible People, 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, and this form is not provided in the required time, the penalty for failing to lodge documents on time can also apply.
In some circumstances, failing to lodge documents when required can be grounds for the ACNC to revoke the registration of a charity (subparagraph 35-10(1)(c)(i) of the ACNC Act). The Commissioner’s approach to the revocation of charities is addressed in Commissioner’s Policy Statement 2014/03: Revocation by the ACNC.
From time to time, the Commissioner may defer the due date for lodgement of documents under section 190-15 of the ACNC Act, including the Annual Information Statement. Deferrals may be granted to certain classes of charities, or to individual charities. To request a deferral, charities should contact reporting@acnc.gov.au. Where a deferral has been granted, the deferred date is treated as the date by which documents were required to 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. Similarly, charities are liable to pay penalties for late lodgement where they fail to notify of changes to their circumstances or details as well as some contraventions or non-compliance with the ACNC Act in the required time, using the approved form.
The penalty amount that applies depends on the size of the charity (see sections 175-40 and 205-25 of the ACNC Act) and is calculated by reference to the ‘base penalty amount’. The base penalty amount is increased for every 28 days (or part of 28 days) that the document is not submitted.
The base penalty amount is calculated by multiplying one penalty unit by the number of 28 day periods (or part of 28 days) 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 2 penalty units: one unit for the first 28 days, and one penalty unit for the subsequent part of 28 days (3 days).
The base penalty amount is then multiplied by 1, 2 or 5 depending on whether the charity is small, medium or large respectively, to calculate the penalty amount payable. The value of a penalty unit is set by section 4AA of the Crimes Act 1914 (Cth), and is subject to change – see Attachment 1.
If the reason that a charity has not submitted a document is because it is no longer operating and therefore not entitled to registration, the ACNC may revoke the charity’s 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 the charity’s liability to pay the penalty. The notice the Commissioner issues will specify the amount of the penalty, the reasons why it applies and the due date to pay the penalty (which must be at least 14 days after the date of the notice).
While penalties must be calculated and communicated by the ACNC, the collector of the penalty is the ATO. 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 remission of the penalty).

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).
Furthermore, in some circumstances, the responsible persons of a charity 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 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 involves 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 power to remit all or part of an administrative penalty that arises due to a failure to lodge documents on time under section 175-60 of the ACNC Act. That is, the Commissioner can determine that a penalty does not apply or reduce the amount of the penalty.
Penalties for late lodgement of documents will generally be applied in such a way as to influence timely submission by charities.
Consistent with the ACNC Regulatory Approach, where a penalty has been imposed for failing to lodge documents on time, the ACNC will take a risk-based approach to remission.
The Commissioner will consider the potential harm of any continued non-compliance (in terms of broader public trust and confidence, the need to maintain the integrity of the Register, etc.) and the charity’s circumstances (in terms of its risk profile, resources and past behaviour).
In deciding whether to remit a penalty in part or in full, the ACNC will consider a number of factors, including (but not limited to):
- the existence of any extenuating circumstances that caused the late lodgement to occur, or the existence of 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, or after a compliance investigation,
- a charity’s compliance history, and
- whether the outstanding documents have subsequently been lodged.
For the purposes of penalty remission, the ACNC considers extenuating circumstances to be those that are outside of the control of the charity, and which had a significant impact on the charity’s ability to meet its reporting obligations.
An inability to lodge the document due to being busy or having a change in staff is unlikely to be considered extenuating circumstances. 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 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 the behaviour that the charity displayed in relation to the failure to lodge on time (such as intentional disregard or lack of reasonable care).
Where a charity has a history of non-compliance, generally penalties will be remitted only where clear evidence is provided that the failure to remit the penalty would be unjust in all the circumstances.
As discussed above, the amount of the administrative penalty varies for charities depending on their size: small, medium or large. The charity’s size is based on its revenue for the reporting period. If the size of a medium or large charity has reduced to a smaller category, since its last reporting period, the Commissioner will consider partially remitting the penalty amount to the penalty amount applicable to the present size of the charity.
If the ACNC decides not to remit or to remit only part of a penalty for failing to lodge documents on time (and the penalty amount that remains payable is more than 2 penalty units), the charity may object to the penalty within 60 days of the penalty notice being served. If the objection is disallowed, the charity may apply for review by the AAT or appeal to a court. For more information, see Commissioner’s Policy Statement 2012/04: Reviews and Appeals.

References

Version	Date of effect	Brief summary of change
Version 1 - Initial policy	01/07/2014	Initial policy endorsed by the Commissioner on 30 June 2014
Version 2	09/01/2017	Amendments to remove reference to transitional arrangements and to further clarify the ACNC’s approach
Version 3	19/06/2017	Amendments to clarify that the base penalty amount is calculated with reference to the number of 28 days periods (or part of a period of 28 days)
Version 4	02/06/2020	Removed outdated reference to penalty unit amount