On this page
- What is changing?
- Do the changes apply to your not-for-profit organisation?
- What does your organisation need to do?
- What other steps can your organisation take to prepare?
- Find out more
What is changing?
From 1 July 2023, non-charitable not-for-profit organisations with an active Australian Business Number (ABN) that self-assess as income tax exempt are required to lodge an annual self-review return with the Australian Tax Office (ATO). Until then, not-for-profit organisations that self-assess had not been required to report annually to the ATO.
The first self-review return is due between 1 July 2024 and 31 October 2024.
The ATO has published a guide to preparing a self-review return.
Do the changes apply to your not-for-profit organisation?
The new reporting obligation will affect your organisation if it:
- is a not-for-profit organisation,
- has an active ABN, and
- self-assesses as income tax exempt
Find out more about self-assessment on our webpage on income tax exemptions.
How do the changes apply to charities?
The changes do not apply to charities registered with the Australian Charities and Not-for-profits Commission (ACNC).
The changes do apply to not-for-profit organisations that haven’t registered with the ACNC but are eligible to do so.
If you are not sure whether your organisation is a registered charity, you can search the ABN Lookup Tool and the ACNC Register.
If you are not sure whether your organisation is eligible to register as a charity, read the ACNC’s checklist on eligibility for charity registration.
To find out more about the difference between a not-for-profit and a charity, read our page ‘What does not-for-profit mean?’
What does your organisation need to do?
This is a good opportunity to review your entitlement to self-assess as income tax exempt, especially if your organisation has self-assessed for a while or if you’ve had a recent change to the organisation’s structure, purpose or operations.
Ask yourself the following questions:
Question 1: Is your organisation eligible to register as a charity?
Not-for-profits that are eligible to become a registered charity are not permitted to self-assess as income tax exempt. Only charities registered with the ACNC can access income tax exemption and other tax concessions.
An organisation may meet the statutory definition of ‘charity’ but choose not to register as a charity with the ACNC. If an organisation meets the statutory definition of ‘charity’ but has not registered as a charity with the ACNC, it is not entitled to access income tax exemption.
If you are not sure whether your organisation is eligible to register as a charity, read the ACNC’s checklist on eligibility for charity registration.
Learn more about charity registration by reading our pages ‘Registration as a charity with the ACNC’ and ‘Applying for Tax Concession Charity endorsement’.
Answer 1: Your organisation is eligible to register as a charity with the ACNC
If your organisation is eligible to register as a charity, your organisation generally has two options:
- register as a charity and apply for income tax exemption through the ATO, or
- stop self-assessing as income tax exempt, lodge a tax return, and potentially pay income tax (see Question 3 below)
Organisations may wish to seek legal and financial advice about the above two options.
Answer 2: You’re unsure whether your organisation is eligible to register as a charity with the ACNC
- Contact the ACNC Advice Line on 13 22 62
- Contact the ATO NFP Premium Advice Service on 1300 130 248
- Make an application for free legal advice (strict eligibility criteria applies) with Not-for-profit Law
Answer 3: Your organisation is not eligible to register as a charity with the ACNC
- Move on to question 2 below
Question 2: Is your organisation eligible to self-assess as income tax exempt?
Only certain categories of not-for-profit organisations are eligible to self-assess as income tax exempt.
Review the self-assessment categories to make sure your organisation fits into one of the eight categories and understand the additional requirements to be eligible to self-assess. You can refer to ATO worksheets and our webpage on income tax exemptions for guidance.
Answer 1: Your organisation is eligible to self-assess
- If your organisation is eligible to self-assess, submit a self-review return between 1 July 2024 and 31 October 2024
Answer 2: You’re unsure if your organisation is eligible to self-assess
- Contact the ATO NFP Premium Advice Service on 1300 130 248
- Make an application for free legal advice (strict eligibility criteria applies) with Not-for-profit Law
Answer 3: Your organisation is not eligible to self-assess
- If your organisation is not eligible to self-assess, not eligible to register as a charity or decides that it does not wish to register as a charity move on to Question 3 below
Question 3: Are you required to lodge a tax return?
If your organisation is not eligible to self-assess, not eligible to register as a charity, or decides that it does not wish to register as a charity, consider whether it needs to lodge an income tax return and potentially pay income tax.
Learn more by reading ‘What if your organisation doesn’t qualify for an income tax exemption’ on our webpage on income tax exemptions and the ATO’s webpage Taxable NFP organisations
You may also need to consider if the principle of mutuality applies to your not-for-profit. More information can be found on the ATO's webpage Mutuality and taxable income for not-for-profits.
What other steps can your organisation take to prepare?
The ATO has published a guide to completing the self-review return form. Work through this guidance so you can consider your response. It may take time for your organisation to consider its options, obtain professional advice (if necessary) and put in place any necessary changes such as updating the organisation’s governing document.
You should also make sure that your organisation’s details are up to date with the ATO. It’s an ABN registration requirement to keep your contact details up-to-date.
This is also important so that you don’t miss important correspondence and so that your key personnel can make enquiries about the organisation’s tax affairs. See the ATO’s guidance on updating your organisation's details here.
Find out more
For more information, see:
- the ATO’s webpage on reporting requirements to self-assess income tax exemption
- The ATO’s information about transitional support available
- The ATO's guide to completing the self-review return form
- The ATO's webinar on how to lodge the NFP self-review return
- The ACNC’s page on Self-assessed income tax exempt organisations
- Our free webinar on Understanding recent tax reforms, available on-demand from our website
- Our free webinar on Top tips for applying for charity registration with the ACNC
- Our free resources about income tax exemption, registering as a charity, managing an organisation’s rules or constitution
- Our eligibility criteria for free advice
The content on this webpage was last updated in April 2024 and is not legal advice. See full disclaimer and copyright notice.
