Mutual transactions of associations (including clubs and societies)

This draft operational statement explains the income tax treatment of amounts societies, clubs and other associations receive from members, other than amounts subject to a specific tax exemption such as for charities or sports clubs.

It explains that the mutual association provisions override the mutuality principle for trading stock and services supplied to members.  It also explains that subscriptions and levies will not be covered by the mutuality principle if the association is not able to distribute to members.  Such amounts may be business income or income under ordinary concepts, depending on the circumstances.  

The statement will be prospective in application when finalised.    

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