Do you need to lodge?

Who needs to lodge

Non-charitable not-for-profits (NFPs) with an active Australian business number (ABN) that self-assess as income tax exempt are required to lodge an annual NFP self-review return.

Eligible types of income tax exempt entities

There are 8 categories of income tax exempt entities that can self-assess eligibility for income tax exemption, outlined in Division 50 of the Income Tax Assessment Act 1997 (ITAA 1997). These are:

• community service organisations
• sporting organisations
• cultural organisations
• educational organisations
• health organisations
• employment organisations
• scientific organisations
• resource development organisations.

NFPs must meet the specific criteria and conditions of these categories and consider their purposes and activities against these criteria to be eligible to self-assess as income tax exempt.

Who doesn't need to lodge

You don't need to complete the NFP self-review return if your NFP is one of the following:

• an NFP with only charitable purposes
• a taxable NFP
• an NFP sub-entity for GST purposes
• a specific type of government entity.

NFPs with only charitable purposes

Charities registered with the Australian Charities and Not-for-profit Commission (ACNC) and endorsed by the ATO to be income tax exempt are not required to lodge the NFP self-review return. Charities registered with the ACNC submit an annual information statementExternal Link to the ACNC.

By law, NFPs with only charitable purposes that meet the legal definition of a charity must be registered with the ACNC and be endorsed by the ATO to be income tax exempt. These entities are referred to as ACNC type of entities.

Charitable NFPs that choose not to register as a charity or take the necessary steps to meet ACNC requirements, are not eligible to self-assess an income tax exemption. They are taxable and may be required to lodge an annual income tax return.

To assess if your NFP has only charitable purposes and is eligible to be registered as a charity use the charity registration tool on the ACNC websiteExternal Link.

ACNC type of entity

ACNC type of entities are charities that:

• are not for profit
• have only charitable purposes, which means any of the following:
  • 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
  • promoting or opposing a change to any matter established by law, policy or practice in the Commonwealth, a state, a territory or another country (where that change furthers or opposes one or more of the purposes above)
• don't have a disqualifying purpose of either:
  • engaging in, or promoting activities that are unlawful or contrary to public policy
  • promoting or opposing a political party or a candidate for political office
• are not an individual, a political party or a government entity
• are generally not a social club, sporting, recreational organisation or professional trade group.

For more information go to the ACNC websiteExternal Link.

Unsure if your NFP has charitable purposes

If you are currently considering your NFP's charitable purposes, you should complete the NFP self-review return by answering ‘yes’ or ‘unsure’ to the charitable purposes question on the return. We’ll work with you and the ACNC after you submit the NFP self-review return to get your tax status and reporting obligations right going forward.

You can find out more information at Is my organisation eligible for charity tax concessions?

For more information watch our recorded webinar what to do if you are charitableExternal Link.

Taxable NFPs

• NFPs that are taxable
• NFPs that find out they are taxable

NFPs that are taxable

If your NFP seeks to advance the common interest of their members rather than benefit of the broader community, you generally don't meet the requirements for income tax exemption and are a taxable NFPs.

Examples of taxable NFPs include:

• social clubs and fraternal organisations
• some business and professional associations
• clubs whose main purpose is providing hospitality services for members
• political parties.

Taxable NFPs need to lodge an income tax return, or a non-lodgment advice if eligible. To find out more about how to meet your reporting obligations, see Taxable NFP organisations.

For more information watch our recorded webinar what to know if your NFP is taxableExternal Link.

NFPs that find out they are taxable

NFPs that have self-assessed as income tax exempt in the past and identify they're taxable when completing the NFP self-review return, must select 'None of the above' at the question ‘Choose a category that best reflects the main purpose of the organisation’. When the self-review return is submitted it will show you that the NFP has a taxable outcome.

We will then send your NFP an automated letter outlining the steps you need to take to meet your income tax obligations as a taxable NFP. You can find out more about the additional support available for your taxable NFP and your next steps at Taxable outcome.

NFP sub-entity for GST purposes

You don't need to complete the return if your organisation is an NFP sub-entity for GST purposes, unless your NFP is the parent organisation.

A NFP sub-entity is set up by a parent organisation to have its branches or units treated as separate entities for GST purposes. These branches or units exist for GST purposes only and don't have any income tax obligations.

NFP sub-entities are not required to lodge an NFP self-review return, as their parent is the entity recognised for income tax purposes.

The parent organisation must complete an NFP self-review return and must include the purposes and activities of the NFP sub-entity along with their own when lodging.

If you’re unsure about your structure for tax purposes, contact your parent entity or see GST branches, groups and non-profit sub-entities.

If your organisation is a non-profit sub-entity, call us to discuss if your sub-entity should be removed from the list of NFPs required to lodge an NFP self-review return. You can call 1300 130 248 for NFP advice between 8:00 am and 6:00 pm, Monday to Friday.

Specific types of government entities

Most government entities are exempt from needing to complete the NFP self-review return. This includes a:

• municipal corporation
• local governing body
• public authority constituted under an Australian law, which means your organisation:
  • is an agency or instrument of government exercising power or command for the public advantage and has governmental authority for doing so
  • possesses 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.

If you're a government entity, you don't lodge an NFP self-review return because you’re income tax exempt by either:

• section 50-25 of the Income Tax Assessment Act 1997
• Division 1AB of Part III of the Income Tax Assessment Act 1936External Link.

If your organisation is a government entity or state or territory body, you may be able to request to have your organisation removed from the list of NFPs required to lodge an NFP self-review return. You can call us on 1300 130 248 for NFP advice between 8:00 am and 6:00 pm, Monday to Friday.

Notify us if you have ceased operating

If your NFP has ceased operating part-way through the 2023–24 income year, you must still lodge an NFP self-review return for that income year.

If your organisation has ceased operating, you must notify us and cancel your ABN. You will need to advise us of the date that your organisation ceased, and we will update our records including those for your reporting requirements.

If you later restart operating, you may be able to have your ABN re-activated applying for an ABNExternal Link from the ABR website.

Find out how to cancel your ABN and what you need to know before you end your organisation.