Income tax exemption checklist – Educational organisations
Your organisation will be exempt from income tax, and can self-assess its exemption, if it meets all of the following requirements:
- it is a public educational institution
- it is not a charity
- it meets one of the 3 following tests
- physical presence in Australia test
- DGR test
- prescribed by law test
- it complies with all the substantive requirements in its governing rules
- it applies its income and assets solely for the purpose for which it is established.
If all of your organisation's purposes are charitable purposes for the public benefit and you do not have any independent non-charitable purposes, your organisation cannot self-assess as income tax exempt under this category. Your organisation will need to be registered as a charity with the Australian Charities and Not-for-profits Commission (ACNC) and receive our endorsement to access an income tax exemption.
For more information on what is a charitable purpose, see the Australian Charities and Not-for-profits Commission's websiteExternal Link.
Public educational institution
A public educational institution is an institution that is available or open to the public or a section of the public and whose sole purpose is providing education. Any other purpose of the organisation must be incidental or ancillary to providing public education. Education in this context does not extend to merely providing information or lobbying.
Public educational institutions may include:
- universities or colleges managed by public bodies
- grammar schools
- primary and secondary schools run by churches or religious bodies
- NFP business colleges.
Organisations that are not public educational institutions include:
- colleges run for the profit of the private owners
- associations operated for their members' professional benefit
- promotional and lobbying bodies.
Many other organisations connected with education are not public educational institutions. Examples are:
- parents and friends committees
- scholarship providers.
If your organisation does not meet all the requirements for exemption for this category, you should check the other exemption categories in Eligible types of income tax exempt organisations.