Not-for-profits need to re-apply for tax exemption

Australian Tax Office sign. | Newsreel
The Australian Tax Office has urged non-charitable not-for-profits to ensure they are ready for new reporting rules. | Photo; Supplied by Australian Tax Office

Thousands of not-for-profit organisations will need to re-apply for income tax exemption status from July 1 this year.

The Australian Tax Office (ATO) said around 150,000 groups would be impacted and they should be preparing now.

From July, non-charitable not-for-profits (NFPs) with an active Australian Business Number (ABN) will need to lodge a new annual NFP self-review return ATO to confirm their income tax exemption status.

The new reporting requirement was introduced in the 2021–22 Federal Budget to ensure only eligible non-charitable NFPs accessed income tax exemption.

ATO Assistant Commissioner Jennifer Moltisanti said the ATO was supporting these NFPs to help them get ready now before the changes come into effect.

“It’s important to us that affected not-for-profits understand the new reporting requirements and are prepared to lodge their first annual return come 1 July,” Ms Moltisanti said.

“Even though the due date is in October, there are things you should do now to make sure you are ready. We also recommend not waiting until the last moment to report, you can report from as early as July 1.”

The ATO said non-charitable NFPs who have an active ABN can get ready now by:

  • Conducting an early review of their eligibility by using the ATO’s guide.
  • Checking all their details are up to date, including authorised associates, contacts and their addresses are current
  • Reviewing their purpose and governing documents to understand the type of NFP they are
  • Setting up myGovID and linking it to the organisation’s ABN using Relationship Authorisation Manager.

The ATO said when it came time to lodge, NFPs could use Online services for business which lets organisations manage their reporting at a time that is convenient to them.

For NFPs that have engaged a registered tax agent, their agent can also lodge on their behalf through Online services for agents.

As an interim arrangement for the 2023–24 transitional year, eligible NFPs unable to lodge online will be able to submit their NFP self-review return using an interactive voice response phone service.

For more information about the upcoming changes and how organisations can get ready, go to the ATO website.