Not-for-profits (NFPs), including sporting clubs, societies and associations, with an active Australian business number (ABN) need to lodge an annual NFP self-review return to continue accessing income tax exemption.
The NFP self-review return will guide you to consider your sporting organisation's purpose and activities against the requirements of an eligible income tax exempt entity.
You need to lodge your first NFP self-review return for the 2023–24 income year, between 1 July and 31 October 2024. If your organisation has its own ABN, you'll need to complete your own NFP self-review return even if it's affiliated with a broader sporting group.
Get ready for annual reporting
To prepare your sporting club, society or association for lodgment, the person responsible for the organisation will need to:
- check your organisation has an active ABN by searching ABN LookupExternal Link
- notify us now if the organisation's address and responsible persons' details need to be updated. This will ensure they have access to the account, receive important tax information and can lodge the NFP self-review return.
- identify your sporting organisation's main purpose and its governing documents
- complete an early self-review to check your sporting organisation is eligible to be income tax exempt
- avoid delays and get in early to set up myGovID and Relationship Authorisation Manager (RAM) so you can complete your NFP self-review return in Online services for business.
- subscribe to our monthly Not-for-profit news for the latest tax and super news, as well as tips and advice, sent directly to your inbox.
If your organisation doesn't lodge the return, they may become ineligible for an income tax exemption and penalties may apply.
How to identify your sporting organisation's main purpose
The main purpose of your organisation must be encouragement of a game, sport or animal racing. Any other purpose of the organisation must be incidental, ancillary or secondary.
Your organisation's governing documents will help identify the purpose for which it was set up. Your organisation's activities in the year of income must then demonstrate that the main purpose is the encouragement of its game, sport or animal racing.
If your organisation conducts significant non-sporting activities in addition to its sporting activities, you'll need to assess if:
- the non-sporting activities are merely incidental or ancillary to the encouragement of the game, sport or animal racing
- the organisation can justify to its members and the public that its main purpose is the encouragement of a game, sport or animal racing.
For many sporting organisations that mostly conduct activities directly related to their game, sport or animal racing, the main purpose will be clear.
Example: main purpose encouragement of sport
A club's primary object in its constitution is the promotion of netball. In the year of income, the club entered several teams at all levels in the local competition. Its sources of income were membership subscriptions, game day food and drink sales, corporate sponsorship, 'sports and recreation' grants, raffles and functions to support representative players, and venue hire. Minutes of meetings, business plans and other club material mostly detail sporting matters.
The club's main purpose is the encouragement of sport.
End of exampleExample: main purpose not sport
The Sandy Shores Country Club's constitution states that the club's object is to provide social and sporting facilities for its members.
The club's main activity is the operation of its clubhouse as a social, gaming and entertainment facility. A small number of members play in bridge, darts and snooker teams sponsored by the club. The club allocates a proportion of its surpluses to local sports and community associations in order to meet certain requirements under state gaming laws.
The club's main purpose is providing social amenities for members.
End of example
Check Sporting organisations and TR 2022/2 Income tax: the games and sports exemption for more information and examples.
See ato.gov.au/NFPtaxexempt for more details on the requirement to lodge a return.