- Introduction
- What would an income tax exemption mean for your community organisation?
- Does your organisation fit into one of the categories to self-assess for an income tax exemption?
- Are there additional ATO requirements to be eligible for the exemption?
- What if your organisation doesn't qualify for an income tax exemption?
- your organisation is a registered charity with the Australian Charities and Not-for-Profits Commission (ACNC) and endorsed by the Australian Taxation Office (ATO) as income tax exempt
- your organisation is not eligible to register as a charity, but falls into a self-assessment category specified in the tax law and therefore ‘self-assesses’ as income tax exempt, or
- your organisation’s annual income falls under the taxable income threshold (currently $417)
More information
For more information about the requirements and processes to be endorsed for tax concessions, see our fact sheet on Applying for TCC endorsement and our webpage on fringe benefits concessions.
See the ATO’s webpage ‘Apply for charity tax concessions endorsement’ for the relevant forms.
- pay any income tax, or
- lodge tax returns (note, however, in some limited cases the ATO may specifically request that your organisation lodge tax returns)
From 1 July 2023, non-charitable not-for-profit organisations with an active Australian Business Number (ABN) that self-assess as income tax exempt will be required to lodge an annual self-review return with the ATO. This is different from a requirement to lodge a tax return.
See our webpage on Changes to income tax requirements for more information.
- collect 'pay as you go' (PAYG) withholding amounts from certain payments (for example, payments of salaries and wages)
- comply with any fringe benefits tax (FBT) obligations (although an endorsement for the FBT rebate or exemption may be available in addition to an income tax exemption for certain organisations), and
- comply with superannuation guarantee obligations
More information
For more information, see:
- the ATO’s webpage Is your community service organisation income tax exempt
- our webpages on fringe benefits concessions and GST
Under changes to income tax reporting requirements, not-for-profit organisations with an active ABN that self-assess as income tax exempt will be required to lodge an annual self-review return with the ATO. The ATO is currently developing the self-review return, which is expected to be released in October 2023. The first self-review return will be due between 1 July 2024 and 31 October 2024.
See our webpage on Changes to income tax requirements for more information.
- the organisation must have a physical presence in Australia
- the organisation must be endorsed as a deductible gift recipient, or
- the organisation must be prescribed by name in the income tax regulations, located outside Australia, and exempt from income tax in its country of residence
- comply with all the substantive requirements in its governing rules, and
- apply its income and assets solely for the purpose for which it is established
Under changes to income tax reporting requirements, not-for-profit organisations with an active ABN that self-assess as income tax exempt will be required to lodge an annual self-review return with the ATO. The first self-review return will be due between 1 July 2024 and 31 October 2024. If your organisation does not submit a self-review return, you may lose your income tax exemption and may face ATO penalties.
See our webpage on Changes to income tax requirements for more information.
Note
Your organisation should seek professional legal or tax advice on its income tax liability. Your not-for-profit organisation may not have to pay tax on all its income as some income items may not be included in certain circumstances.
