We know the vast majority of not-for-profit (NFP) organisations operate with integrity and serve the public good. However, recently we've seen a resurgence in the promotion of, and participation in, tax schemes that involve entities exploiting NFP structures to avoid taxes.
We have evidence of these schemes being promoted online and on social media, that results in participants setting up a foundation that they claim is a NFP and exempt from taxes. Unlike genuine NFPs, participants funnel their untaxed employment, contractor, or business income through these ‘foundations’, to avoid paying tax on this income.
We originally brought these schemes to the public's attention in 2016 when we issued Taxpayer Alert TA 2016/5 Purported tax-exempt non-profit ‘foundations’ used to evade or avoid taxation obligations. We're also taking steps to raise awareness about the danger of schemes with the broader community, for example in our recent media release.
How you can help
If you become aware of these arrangements, we ask for your help to identify those individuals or entities who are promoting them or who are involved in them.
These schemes deprive the Australian community of crucial funding for essential services and undermine public trust in legitimate NFPs. With your help we can identify more of these ‘foundations’ and stop their activity.
We take unlawful tax schemes such as these very seriously, and participants can face heavy penalties. We also take targeted action against promoters of unlawful tax schemes, including the application of penalties under the promoter penalty laws.
You can report a tax or super scheme confidentially by:
- completing the tip-off form on our website
- contacting us on 1800 060 062.