To be a tax-exempt sporting club, your club must also pass one of the following tests:
Physical presence in Australia test
Your club will meet this test if both:
- it has a physical presence in Australia (which is greater than merely operating through an agent in Australia or holding property in Australia – a division in Australia would show the necessary physical presence)
- to the extent that it has a physical presence in Australia, it incurs its expenditure and pursues its objectives principally in Australia (in determining this, there are special rules for offshore use of amounts you received as gifts or government grants).
Deductible gift recipient test
Your club will meet this test if either:
- it has been endorsed as a DGR in its own right and not merely for a fund, authority or institution it operates
- it is listed by name in the income tax law as a DGR.
DGRs are entities to which donors can make income tax deductible gifts. The income tax law determines which organisations and types of organisations can qualify as DGRs.
Prescribed by law test
Your club will meet this test if it is prescribed by name in the income tax regulations, which is decided by government, and either:
- is located outside Australia and is exempt from income tax in its country of residence
- has a physical presence in Australia but incurs its expenditure and pursues its objectives principally outside Australia.
Further information can be found by going to Explanation of the 3 tests.
A guide for office bearers and advisers of non-profit clubs for self-assessing if their club is exempt from income tax.