Income tax exemption checklist – Health organisations
Your organisation can self-assess that it is exempt from income tax if it meets all of the following requirements of being either:
- a hospital
- either a public hospital or a hospital that is carried on by a not-for-profit society or association
- not a charity
- meets one of the 3 following tests
- physical presence in Australia test
- DGR test
- prescribed by law test
- complies with all the substantive requirements in its governing rules
- applies its income and assets solely for the purpose for which it is established; or
- a private health insurer within the meaning of the Private Health Insurance (Prudential Supervision) Act 2015 that is not carried on for the profit or gain of its individual members.
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.
Hospital
A hospital is an institution in which patients receive continuous medical care and treatment for sickness, disease or injury. The provision of 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.
Homes to provide nursing care such as feeding, cleanliness and similar care are not hospitals. However, nursing homes for people suffering from illness are accepted as hospitals.
Hospices for the terminally ill will generally be hospitals. Minor outpatient and nursing care will not prevent an institution being a hospital.
Not-for-profit hospitals include those run by churches and religious orders.
Society or association
A society or association is an entity made up of people who have come together to implement a common purpose.
An individual, or an incorporated body that has only one member, is not a society or association. A fund which only holds money to support activities carried out by other entities is also not a society or association.
The members of a society or association do not need to be natural persons. They can be an association of other entities.
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.