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NFP self-review return question guide

Review these questions with your NFP committee or board to support your annual self-assessment for income tax exemption.

Last updated 30 October 2024

Non-charitable not-for-profits (NFPs) with an active Australian business number (ABN) need to lodge an annual NFP self-review return to confirm their eligibility to self-assess as income tax exempt. You may not need to lodge if your NFP is:

  • a certain type of government entity
  • an Australian Charities and Not-for-profit Commission (ACNC) type of entity, as it cannot self-assess income tax exemption
  • an NFP sub-entity (for GST purposes)
  • another excluded type of entity.

For more information go to Who doesn't need to lodge

Overview

The NFP self-review return has 3 broad sections, for which you will answer around 5 questions based on the eligible category you are self-assessing income tax exemption under. The key questions are:

Section 1: Organisation details

Question 1: What was the estimated annual gross revenue for the organisation?

We use this information so we can give tailored support to NFPs of different sizes.

Select from:

  • Small: $0 – $150,000
  • Medium: over $150,000 – $3,000,000
  • Large: over $3,000,000.

Annual gross revenue is all the money that passes through the organisation in an income year. This includes sales, interest, receipts from government, grants, donations and bequests, investment income and receipts from members.

The standard tax year is from July to June. However, you can provide your estimated annual gross revenue for an approved substituted accounting period – for example, October to September.

Section 2: Income tax self-assessment

Question 2: Choose a category that best reflects the main purpose of the organisation.

To work out the organisation's main purpose, look at its governing documents, activities, use of funds and history. Any other purpose of the organisation must be incidental, ancillary or secondary to the main purpose.

Select from:

Community service

This is a society, association or club established for community service purposes, except political or lobbying purposes. It promotes, provides or carries out activities, facilities or projects for the benefit or welfare of the community. Organisations that advance the common interests of their members or provide private member benefits can't be community service organisations.

If your organisation is a community service:

Otherwise, read on for more information about community service organisations. If you don't think your organisation matches the description, go back to the start of Section 2 to see whether another category is suitable.

More information about community service organisations

Community service organisations work for the benefit of the community or members with a particular need by reason of youth, age, infirmity or disablement, poverty or social or economic circumstances.

Community service organisations include:

  • Justices of the Peace associations
  • playgroup associations
  • traditional and community service clubs
  • pensioner or senior citizens associations
  • industry ombudsman.

Community service organisations don’t include:

  • clubs that promote public speaking or debating
  • clubs that provide a social forum for retired or semi-retired businesspeople and senior public servants
  • clubs that provide a social forum for expatriates of a particular country
  • pensioner associations that conduct significant political or lobbying activities
  • military service unit organisations and social clubs for newcomers to a particular residential area.

Cultural

This is a society, association or club whose main purpose is to encourage art, literature or music, or is established for musical purposes. This can include training, performing, displaying, providing information, studying, judging and critiquing.

Professional associations that advance the common interests of members are not income tax exempt. Neither are organisations whose main purpose is providing social and recreational facilities and activities.

If your organisation is cultural:

Otherwise read on for more information about the meaning of a cultural purpose. If you don't think your organisation matches the description, go back to the start of Section 2 to see whether another category is suitable.

More information about cultural organisations

A cultural organisation’s main purpose must be the encouragement of art, literature, music or for musical purposes. Any other purpose must be incidental or secondary to the main purpose:

  • Art includes drama and ballet as well as painting, architecture and sculpture, but not exhibition of stamps by philatelic clubs and associations.
  • Literature includes a wide range of written or printed works, including works in different languages, on particular subjects or by particular authors.
  • Music includes the performance of vocal or instrumental works, and covers various styles (for example, classical, jazz, popular and liturgical).

Educational

This is a public institution whose main purpose is providing education to the public or a section of the public. Any other purpose of the organisation must be incidental or ancillary to this. Education doesn't extend to just providing information or lobbying.

If your organisation is educational:

Otherwise read on for more information about the meaning of an educational purpose. If you don't think your organisation matches the description, go back to the start of Section 2 to see whether another category is suitable.

More information about educational organisations

Public educational institutions include universities or colleges managed by public bodies, grammar schools, primary and secondary schools run by churches or religious bodies and not-for-profit business colleges.

Organisations that are not public educational institutions include colleges run for the profit of private owners, associations operated for their members’ professional benefits and promotional and lobbying groups.

Employment

This includes an employee or employer association or a trade union.

If your organisation is employment:

Otherwise read on for more information about the meaning of an employment purpose. If you don't think your organisation matches the description, go back to the start of Section 2 to see whether another category is suitable.

More information about employment organisations

An employment organisation is a trade union or an employee or employer association registered or recognised under the Fair Work (Registered Organisations) Act 2009 or an Australian law relating to the settlement of industrial disputes.

To be income tax exempt, the organisation must meet the following conditions. It must:

  • comply with all the substantive requirements in its governing rules
  • apply its income and assets solely for the purpose for which it is established
  • be located in Australia
  • pursue its objectives and incur its expenditure principally in Australia (principally is greater than 50%).

Pursuing objectives in Australia can include things done offshore if they are a means of pursuing those objectives. For example, sending employees to a conference overseas to aid their efficiency for the Australian objectives.

Government and NFP sub-entities

Certain types of government entity, NFP sub-entities (for GST purposes) and other excluded entities are not required to lodge an NFP self-review return. To discuss whether the organisation should cancel its NFP self-review reporting obligations, contact the NFP Advice Service.

If your organisation:

  • meets the definition of a government entity, an NFP sub-entity or another excluded entity, don't lodge this NFP self-review return
  • isn't defined here, go back to the start of Section 2 and see whether another category is suitable.

More information about certain types of government entities

These entities are either a:

  • state or territory body under Division 1AB of Part III of the Income Tax Assessment Act 1936
  • municipal corporation
  • local governing body
  • public authority constituted under an Australian law, which means your organisation  
  • agency or instrument of government exercising power or command for the public advantage and has governmental authority for doing so
  • entity that has powers that are exceptional compared to ordinary individuals, but not necessarily coercive powers
  • constitutionally protected fund
  • 100% subsidiary of the Future Fund Board that is incorporated under an Australian law.

More information about NFP sub-entities and other excluded entities

NFP sub-entities have been chosen by a parent entity to be treated as a separate branch or unit for GST purposes only. For more information, see GST branches, groups and non-profit sub-entities.

For a list of entities that are excluded from lodging an NFP self-review return, see Do you need to lodge.

Health – hospital

This includes a public hospital or hospital operated by a not-for-profit society or association.

If your organisation is health – hospital:

Otherwise read on for more information about the meaning of a health – hospital purpose. If you don't think your organisation matches the description, go back to the start of Section 2 to see whether another category is suitable.

More information about health – hospitals

A hospital is an institution where patients receive continuous medical care and treatment for sickness, disease or injury. Providing accommodation is integral to a hospital's care and treatment. Clinics that mainly treat ambulatory patients who return to their homes after each visit are not hospitals. However, day surgeries that provide beds for patients to recover after surgery may be hospitals.

For more information, see Health organisations.

Health – private health insurer

This is a private health insurer that doesn’t operate for the profit or gain of its individual members.

If your organisation is health – private health insurer:

Otherwise read on for more information about the meaning of a health – private health insurer purpose. If you don't think your organisation matches the description, go back to the start of Section 2 to see whether another category is suitable.

More information about health – private health insurers

A private health insurer is an insurer within the meaning of the Private Health Insurance (Prudential Supervision) Act 2015. It also doesn’t operate for the profit or gain of its individual members.

For more information, see Health organisations.

Resource development

This is a society or association that promotes the development of Australian resources, aviation and tourism. If the organisation's main purpose is providing services to members, it is not income tax exempt. This applies even if the services help members use the resources better.

If your organisation is one of resource development:

Otherwise read on for more information about the meaning of a resource development purpose. If you don't think your organisation matches the description, go back to the start of Section 2 to see whether another category is suitable.

More information about resource development organisations

Aviation, tourism and the various Australian resources that are listed below are defined by their ordinary meaning.

Australian resources include:

  • horticultural
  • agricultural
  • aquacultural
  • fishing
  • industrial
  • manufacturing
  • pastoral
  • viticultural
  • information and communications technology.

Resource development organisations include a society or association that promotes the development of aviation, tourism and Australian resources by different means, including:

  • research
  • providing facilities
  • training
  • improving marketing methods
  • facilitating cooperation and similar activities.

Scientific – other

This is an institution or association established and operated to advance encourage science through activities such as:

  • research
  • exploration
  • teaching.

If your organisation is scientific – other:

Otherwise read on for more information about the meaning of a scientific – other purpose. If you don't think your organisation matches the description, go back to the start of Section 2 to see whether another category is suitable.

More information about scientific – other

Scientific institutions are established and operated primarily to advance science. Common ways of advancing science include research, exploration and teaching. This often involves disseminating information.

The institution isn't income tax exempt if it:

  • operates for the profit of individual owners or members
  • is a professional association primarily run for the professional or business interests of members.

Scientific associations are established to encourage science. Recreational or hobby clubs don't qualify. Their main purpose of scientific associations must be to encourage science, not promote the professional or business interests of members.

For more information, see Scientific organisations.

Scientific – research fund

This is a fund established to enable scientific research to be conducted by, or in conjunction with, public universities and public hospitals.

If your organisation is scientific – research fund:

Otherwise read on for more information about the meaning of a scientific – research fund purpose. If you don't think your organisation matches the description, go back to the start of Section 2 see whether another category is suitable.

More information about scientific – research funds

A scientific research fund must have sufficient links with public universities or public hospitals. The fund doesn't conduct the scientific research. It is conducted by a university or public hospital, or by other bodies in conjunction with a university or hospital. The fund may enable the research by various means, including providing money or facilities.

To be income tax exempt, the fund must be used for the purposes for which it was established. If it's being used for other purposes, it's not exempt.

The fund must also meet one of the following conditions. It must be either:

  • located in Australia and incur its expenditure principally in Australia
  • established for the purposes of enabling scientific research to be conducted principally in Australia ('principally' is greater than 50%)
  • a deductible gift recipient (DGR).

In working out whether the fund incurs its expenditure principally in Australia, it can disregard any distributions it makes of amounts it received as gifts or government grants.

For more information, see Scientific organisations.

Sporting

This is a society, association or club whose main purpose is encouraging a game, sport or animal racing. The organisation won't be income tax exempt if its main purpose is providing non-sporting facilities and activities that are social or recreational in nature.

If your organisation is sporting:

Otherwise read on for more information about the meaning of a sporting purpose. If you don't think your organisation matches the description, go back to the start of Section 2 see whether another category is suitable.

More information about sporting organisations

A sporting organisation’s main purpose is the encouragement of a game, sport or animal racing.

Games and sports extend to:

  • athletic games or sports (such as football and swimming)
  • non-athletic games (such as chess and bridge).

The income tax exemption includes horse racing, trotting, greyhound racing and the racing of other animals.

Encouragement of games or sports extends to less direct means such as:

  • research or testing
  • developing referees
  • providing sporting facilities.

Games and sports don't extend to:

  • stamp-collecting
  • keeping and showing pets
  • making model railways
  • maintaining vintage cars
  • various social and recreational pursuits.

None of these categories

If your answer is None of these categories, your organisation doesn't meet the requirements to self-review as income tax exempt:

Prohibiting the distribution of income or assets to members

Question 3: Does the organisation have and follow clauses in its governing documents that prohibit the distribution of income or assets to members while it is operating and winding up?

Select Yes or No.

If you select No, this message appears:
'The organisation can still self-assess as income tax exempt if it doesn’t have these types of clauses in its governing documents, provided it has not distributed any assets or income to members. However, it has until 30 June 2025 to update its governing documents. Failure to do so will mean that it cannot self-assess as income tax exempt from 1 July 2024.'

Depending on your answer to Question 2 about the main purpose of your organisation:

  • go to question 4 Existing, operating and incurring expenditure in Australia if your organisation's main purpose is either: 
    • Community service
    • Cultural
    • Educational
    • Health – hospital
    • Scientific – other
    • Sporting
  • go to question 5 Charitable purposes if your organisation's main purpose is either:
    • Employment
    • Health – private health insurer
    • Resource development
    • Scientific – research fund.

More information about governing documents

A governing document can be called:

  • rules or articles of association
  • constitution
  • rule book
  • deed of trust.

Your governing documents should set out:

  • your organisation’s purpose
  • how it is governed, operates and makes decisions.

Your NFP organisation needs to either:

  • have clauses in its governing documents stating that profits and assets won’t be distributed for the benefit of members – both while it is operating and when it winds up.
  • act consistently with the intent of these clauses and update its governing documents with these clauses by 30 June 2025 (as failure to do so will mean that it cannot self-assess as income tax exempt from 1 July 2024).

For more information, including example clauses you can include in your governing documents, see What type of NFP is your organisation?

Existing, operating and incurring expenditure in Australia

Question 4: Does the organisation exist, operate and incur its expenditure entirely in Australia?

If you select:

Sub-question 4.1: Does the organisation incur expenditure and pursue objectives principally in Australia?

Principally means greater than 50%. If it has disregarded amounts, the organisation may still meet the physical presence in Australia test even if it doesn't pursue its objectives and incur its expenditure principally in Australia.

If you select:

Sub-question 4.2: Is the organisation a deductible gift recipient (DGR)?

A DGR entity is entitled to receive income tax deductible gifts. All DGRs must be endorsed by the ATO unless they are named specifically in income tax law. There are 2 types of DGR endorsement:

  • One is for entities that are endorsed as DGRs in their own right.
  • The other is for an entity that is endorsed as a DGR only for a fund, authority or institution that it operates.

For more information, see DGR categories.

If you select:

Sub-question 4.3: Is the organisation located outside Australia and prescribed by name as income tax exempt in income tax regulations?

If you select:

Charitable purposes

Question 5: Does the organisation have any charitable purposes?

Select Yes, No or Unsure.

If you select Yes or Unsure, this message appears: 'The ATO may contact the organisation to provide guidance to help determine its charitable status.'

Once your selection is made, go to Section 3: Summary and declaration – Income tax exempt.

More information about charitable purposes

Charitable purposes include:

  • advancing health, education, religion or culture
  • advancing social or public welfare
  • promoting or protecting human rights
  • preventing or relieving the suffering of animals
  • advancing the natural environment
  • promoting reconciliation, respect and tolerance between groups of individuals in Australia
  • advancing the security or safety of Australia or the Australian public
  • other similar purposes that are beneficial to the general public.

To check whether your organisation is eligible to be registered as a charity, use the registration tool on the ACNC websiteExternal Link.

Section 3: Summary and declaration

The summary shows the answers you gave to the questions in Sections 1 and 2. Based on your answers, your taxable outcome will be either:

Self-assessed as income tax exempt

The following statement will appear: 'Based on the information provided, the organisation has self-assessed as income tax exempt for this income year'.

Acknowledgment and declaration

Select:

  • the boxes to acknowledge your income tax exempt status and that the organisation isn't claiming any tax offset refunds for the income year
  • the box to sign the declaration on behalf of the organisation
  • Submit to lodge NFP self-review return.

When lodging through Online services for business, you'll also have the option to print a copy of the questions and your answers to share with your board, committee or tax agent.

Confirmation of income tax exempt status and next steps

You will receive a lodgment receipt ID and information explaining that your organisation:

  • has met its NFP self-review return obligations for the 2023–24 income year
  • must lodge an NFP annual self-review return in future years unless its circumstances change and it is no longer income tax exempt.

When lodging through Online services, you can print a copy of the confirmation page. When lodging through the self-help phone service, you should write down the confirmation receipt number and keep a copy of it for your records.

Self-assessed as taxable

The following statement will appear: 'Based on the information provided, the organisation has self-assessed as ineligible for an income tax exemption.'

Declaration

Select:

  • the box to sign the declaration that the lodgment is informational only and the organisation may be required to lodge a tax return.
  • Submit to lodge the NFP self-review return.

When lodging through Online services for business, you have the option to print a copy of the questions and your answers to share with your board, committee or tax agent.

Confirmation of taxable status and next steps

You will receive a lodgment receipt ID and instructions on what to do next. The instructions state that the organisation:

  • may need to lodge an income tax return for 2023–24 by 15 May 2025 (if the organisation has an approved substituted accounting period see lodgment dates for 2023-24 income tax return)
  • can notify us if it is not required to lodge an income tax return in some circumstances.

Find out more about what you need to lodge, at Taxable NFP organisations.

When lodging through Online services, you can print a copy of the confirmation page. When lodging through the self-help phone service, you should write down the confirmation receipt number and keep a copy of it for your records.

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