Understanding Australian Tax Office Requirements for Non-Charitable Not-for-Profits

As of the 2023–24 income year, Australian non-charitable not-for-profit organisations (NFPs) holding an active Australian Business Number (ABN) will need to comply with new requirements set forth by the Australian Tax Office (ATO). This significant change entails the lodging of an annual NFP return for self-assessment as income tax exempt. Here's what NFPs need to know to ensure compliance and a seamless transition into this new regulatory landscape.

Lodgment Period and Method

Commencing from the 2023–24 income year, NFPs can lodge their annual self-review return between 1 July and 31 October online via MyGovid or through their Tax agents if authorised to do so.

Preparing for Lodgment

To facilitate a smooth lodgment process, NFPs should undertake the following preparatory steps:

1. Review Organization Details: Ensure all organisational details, including addresses, associates, and authorised contacts, are up to date.

2. Assess Organisational Purpose: Reflect on the organisation's primary purpose and review its governing documents to ensure compliance with eligibility requirements for the exempt category.

3. Setting Up myGovID: NFPs must set up a myGovID, a secure digital identity credential essential for accessing various government online services.

Non-charitable NFPs with an active Australian business number (ABN) will soon need to lodge their annual NFP return to self-assess as income tax exempt.

Who doesn't need to lodge

A government entity, a charity registered with the Australian Charities and Not-for-profits Commission (ACNC), a State or Territory body, and an NFP sub-entity for GST purposes are not required to lodge the annual NFP self-review return.

Taxable NFPs are also not required to lodge as they already lodge an income tax return or notify the tax office each year.

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