Oz: Is the EEVblog An Educational or Scientific Organisation?

[EEVblog]

If so I could be income tax free. Hmm...

https://www.ato.gov.au/Non-profit/Your-organisation/Do-you-have-to-pay-income-tax-/Types-of-income-tax-exempt-organisations/Educational-organisations/

https://www.ato.gov.au/Non-profit/your-organisation/do-you-have-to-pay-income-tax-/types-of-income-tax-exempt-organisations/scientific-organisations/

[Muttley Snickers]

For some of us it's a religious institution so add this one below as well. 

https://www.ato.gov.au/non-profit/getting-started/in-detail/types-of-charities/religious-institutions--access-to-tax-concessions/#Religiousinstitution

[cjm]

and maybe even a community service organisation too?!

https://www.ato.gov.au/Non-profit/your-organisation/do-you-have-to-pay-income-tax-/types-of-income-tax-exempt-organisations/community-service-organisations/

[EEVblog]

and maybe even a community service organisation too?!
https://www.ato.gov.au/Non-profit/your-organisation/do-you-have-to-pay-income-tax-/types-of-income-tax-exempt-organisations/community-service-organisations/

For forum is most certainly a community service.

I have contacted my accountant to see what he thinks.
Part of my email reasoning:

1) The primary goal of my EEVblog Youtube channel for the last 8 years
has been engineering and scientific education. It's basically all the
channel does.
2) The primary goal and focus of my business is to produce educational
videos which I provide for free to the public. There is no paid
content or paid courses.
3) About half of my income comes from companies who advertise on my
channel and website in order to generate income for me to produce more
educational content.
4) At least half of my new full time employee's job is to provide
additional free educational videos and content.
5) I provide and maintain a public internet community forum that costs
money to run, and it is free for the benefit of the public and
engineering and scientific education.
6) I take a wage and occasional bonuses, but basically all of the
company profit goes back into running what is essentially a free
educational business.

I think I might have a good case to spin off the EEVblog into a tax-exempt educational institution 

[X]

Mate, I would love to see you pull this one off.

If all else fails:
7) Advancement of religion (by virtue of a "following" or fan base. )

But what about the products you have such as EEVBlog meter and uCurrent? The ATO may see this as being taxable income.

And given the nature of tax law you may even want to consult a tax lawyer (ie. not me) if the accountant can't sort it out.

A brief look around also suggests some NSW-specific tax laws too, so this could get very interesting.

[mrpackethead]

For some of us it's a religious institution so add this one below as well. 

https://www.ato.gov.au/non-profit/getting-started/in-detail/types-of-charities/religious-institutions--access-to-tax-concessions/#Religiousinstitution

Arch Bishop DAVID.

Members of the forum will be refered to as brothers or sisters.

I am appointing my self as treasurer,  you can send your mandatory 10% of your income to  sendmeyourmoney@sendmeyourmoney.com

[cjm]

That all makes absolute sense Dave. One great educational value of the forum I see is that student members get to interact with experienced engineers from industry. So, the very best with this! I'm sure the forum here would support this in anyway possible - maybe letters of support from people involved in education and industry? I'm not an Aussie, so maybe not of any help, but I teach in an EE department (mostly software/networks unfortunately!) - but let me know if I can help. 

[Towger]

Selling products is where it gets murky.  But the simple solution is to spin it off into a separate 'EEV Sales and Services' company.  We did this then our government had a lower Corporation Tax rate for manufacturing companies.  The down side was keeping two separate sets of accounts and associated costs.   

[Cerebus]

Selling products is where it gets murky. 

Depends. The London Internet Exchange (LINX), sells goods and services to its members but is constituted as a not-for-profit company limited by guarantee and that is recognised by the taxman (in the UK obviously). The turnover on goods and services is around £13 million. The amount of surplus (what would be profit for a fully commercial company) that can be retained without attracting taxation is limited compared to what a charity could retain from selling goods and services as a means of fund raising. I wouldn't be surprised if Australian tax law was similar in both respects. That is, there are not-for-profit endeavours that receive some tax concessions and there are fully fledged charities that are tax exempt, but both can trade in goods and services to raise funds for their principal aims.

[EEVblog]

But what about the products you have such as EEVBlog meter and uCurrent? The ATO may see this as being taxable income.

Yes, and I think it may need two companies to work, although that remains to be seen. One does the commercial products, the other does the free educational stuff.
That's basically how it operates at the moment anyway, with the commercial product sales paying for a lot of the free stuff.

Will be interesting.

Of course I still pay personal income tax on my wages, no escaping that.

[EEVblog]

Selling products is where it gets murky.  But the simple solution is to spin it off into a separate 'EEV Sales and Services' company.  We did this then our government had a lower Corporation Tax rate for manufacturing companies.  The down side was keeping two separate sets of accounts and associated costs.

Yes, there is certainly extra cost in that. It needs a new company, bank accounts etc). But if the tax saving from the educational part pays for that then it's worthwhile.

Off the bat I can't see why I couldn't do this, as it's the very reason the ATO have tax-free thresholds for education. Would be interesting to know if any other Oz online content producer (Youtube or otherwise) has done this before.

[CJay]

It's easy to become an ordained minister, simple as paying a small fee and filling out your details on a form, some even do it for free but would you really want to?

Best pursue the educational side of things and leave the magic to religious nuts and RF designers...

[Jeroen3]

Do you have to pay any taxes on the value of mailbox items?

[X]

It's easy to become an ordained minister, simple as paying a small fee and filling out your details on a form, some even do it for free but would you really want to?

Best pursue the educational side of things and leave the magic to religious nuts and RF designers...

I've been considering this just out of principle, but have become rather preoccupied in recent times. I can become an ordained minister, then have some fun with various churches around the place. As an old saying goes, fight fire with fire.

Do you have to pay any taxes on the value of mailbox items?

Only on items he purchased from somewhere in Oz. I believe they have (or want to) introduce GST for overseas purchases too, but I'm not sure if this has been given the green light yet.

[LaserSteve]

If EEVBLOG is a religion, will we violate the forum rules by declaring ourselves  Anodist or Cathodelic? Is magic smoke holy?
Just kidding..

Steve

[X]

Yes, and I think it needs two companies to work. One does the commercial products, the other does the free educational stuff.
That's basically how it operates at the moment anyway, with the commercial product sales paying for a lot of the free stuff.

This could turn into a mess if you're not careful, the commonwealth Corporations Act is a beast. This act also covers small businesses that are not incorporated.

If EEVBLOG is a religion, will we violate the forum rules by declaring ourselves  Anodist or Cathodelic? Is magic smoke holy?

And new recruits shall henceforth be known as tranbrothors and transistors.

[skarecrow]

Yes, and I think it needs two companies to work. One does the commercial products, the other does the free educational stuff.
That's basically how it operates at the moment anyway, with the commercial product sales paying for a lot of the free stuff.

This could turn into a mess if you're not careful, the commonwealth Corporations Act is a beast. This act also covers small businesses that are not incorporated.

If EEVBLOG is a religion, will we violate the forum rules by declaring ourselves  Anodist or Cathodelic? Is magic smoke holy?

And new recruits shall henceforth be known as tranbrothors and transistors.

And the non-followers resistors? :-D

Sent from my XT1565 using Tapatalk

[cdev]

Its complicated and it might limit a great deal of what you do, at the same time, its obvious to me, you really like that aspect of EEVBlog and it shows. My first impulse was that yes, its a natural, but then thinking about the double edged sword of bureaucracy, I thought, maybe not.

Maybe you could have a separate organization that was an educational nonprofit and share whatever functionality was legal to share without breaking rules on commingling funds.

Keep in mind that whenever you are involved with government or government money, all sorts of new requirements kick in.

As a nonprofit is a quasi-public entity they have to be somewhat accountable to the public.


Also.. increasingly its not just local/state (or provincial)/national laws you may need to deal with, also now international  rules and organizations exist, which currently few if any of us need to interact with, but thats changing fast and a new and quite bizarre world is emerging there - with its own share of corruption.. International orgs at the top level are variously open to in many cases totally opaque to external accountability at the human being level, and THEY also have rules that in the future (not so often but more often than we think) will likely apply, that are completely different.

That said, its clear there will be huge opportunities opening up in technical education for society and I would much rather have a knowledgeable and pragmatic person like you involved in that than out of touch academics or purely for-profit entities that might have questionable business practices.

The for-profit educational industry is becoming a real drain on many people's futures and for a long time Ive felt that people could do much better. What this blog seems to be extremely good at is facilitating peoples self-directed educational paths, helping them connect up with others with like skills and experiences. Its a very efficient new kind of education.

[mtdoc]

I believe in the US you need to apply for and be granted non-profit status.  Is that true in Australia?  If so, why not just apply and see what happens?

[mrpackethead]

And the non-followers resistors? :-D

if you truely believe though you will be a transformer

[Jeroen3]

Do you have to pay any taxes on the value of mailbox items?

Only on items he purchased from somewhere in Oz. I believe they have (or want to) introduce GST for overseas purchases too, but I'm not sure if this has been given the green light yet.

But stuff is being sent in as gift, right? Doesn't that violate some rules regarding non-profits/tax-exempts?

[Brumby]

Dave has some homework to do on this, that's for sure.

I, too, believe there will need to be two separate entities to allow this to fly - the trick will be putting the right stuff under the right entity....

[amspire]

But what about the products you have such as EEVBlog meter and uCurrent? The ATO may see this as being taxable income.

Yes, and I think it may need two companies to work, although that remains to be seen. One does the commercial products, the other does the free educational stuff.

I think this is the way to go. Trying to function as a pure research or educational organisation will have a lot of restrictions.

You will have the fun of Dave Jones of EEVblog paying Dave Jones of EEVblog Research for a study of the various technologies visible in chip dies. Then Dave will have to pay Dave of EEVblog Education to make a video and for the cost of the Internet bandwidth and hosting costs. Then if you want to set up a charity foundation to encourage the setting up of electronics clubs in schools, Dave of EEVblog can donate money and equipment to Dave of the esteemed and respected EEVblog Foundation.

[EEVblog]

Just spoke to my accountant at length, and yes it's possible, but no there really isn't any tax advantage that he can find.
Simplistic example - An educational institution really shouldn't be a profit making business, and if it is then that's iffy, and if it isn't (e.g. I take out all the income as wages) then there is no point being a tax-free entity. It gains you nothing.

Also, there is a clause in the tax system that gets you for setting up entities and schemes with the sole purpose of minimising tax. This essentially comes under tax evasion.
I can probably avoid that by saying I'm doing it for the good of the community (which I am of course), but it's still a red flag.

He'll mull it over some more and talk to some colleagues, but basically it would a be a lot of hassle for little or no gain.

[Brumby]

I was wondering about the benefit of doing this and I'm not surprised by your accountant's comment.

The only real benefit might be from access to other benefits - such as exemption from GST and other perks.

Still, I'm not in a position to speak with any authority on this.