If your not-for-profit [NFP] isn’t a charity but still enjoys income tax exemption, there’s a new hoop to jump through! Non-charitable NFPs with an active ABN now need to lodge an annual NFP self-review return with the Australian Tax Office to prove they still qualify. But don’t panic, this year they’ve extended the deadline to 31 March 2025, so there’s time to get things in order. 

These new rules might sound like just another form to fill out, but the goal is to make the tax system more transparent and ensure only eligible NFPs are benefiting from income tax exemptions. So, what does this all mean for your NFP? Let’s break it down!

 

do you need to lodge a return for your NFP? 

If your non-charitable NFP self-assesses as income tax exempt and holds an ABN, then yes, you do! Here’s what you’ll need to do: log in, answer some questions about your NFP’s operations, and tell the ATO which of the eight income tax-exempt categories outlined in Division 50 of the Income Tax Assessment Act 1997, fits your organisation. 

These are the eight categories: 

  • Community service 
  • Sporting 
  • Cultural 
  • Educational 
  • Health 
  • Employment 
  • Scientific 
  • Resource development 

If your NFP falls into one of these buckets, you’re good to go. Just remember, if you’re a charitable NFP, you’re off the hook here because you’ll be dealing with the ACNC instead. Also, if your NFP isn’t tax-exempt, you can continue lodging your usual tax returns. 

 

what you need to know before you lodge 

Before you lodge, make sure your NFP’s principal authority is correctly listed in the Australian Business Register [ABR]. For NFPs run by boards and committees, this step is essential, particularly if you need a tax agent’s help to lodge the return. The ATO requires the organisation’s principal authority to complete agent linking through the ABR, so having outdated information can cause delays. Ensuring that the person authorised to act on behalf of your NFP is accurately listed allows you to easily link with a tax agent in the ATO’s systems, saving time and avoiding a last-minute rush. It’s a quick fix now that could save you serious hassle when the lodgement deadline nears! 

 

how to lodge a NFP self-review return 

Good news—lodging the self-review return is designed to be as painless as possible. You can either do it online through the ATO’s Online Services for business or use their self-help phone service on 13 72 26. Better yet, if you have a tax agent, they can lodge it for you. 

Here’s what you need to know to make it quick and easy: 

It’s fast: The ATO says the whole thing takes around 10 minutes [once you’re ready]. 

It’s flexible: While the official deadline is 31 October each year, this time they’re giving you until 31 March 2025 to get it done without facing penalties. 

It’s simple: Just a few questions to confirm your NFP is still eligible for tax exemption. Easy-peasy! 

 

steps for a stress-free lodgement 

We’re all about avoiding unnecessary stress at businessDEPOT, so here’s our tip for a smooth lodgement: 

  1. Update your ABN details: Check that your NFP’s address and associate details are up to date. This is a must for accessing ATO services and makes everything run like clockwork. 
  2. Get your documents ready: If you’re lodging by phone, have your ABN and any ATO reference numbers ready to go. The ATO’s website has a handy preview of the questions you’ll need to answer.
  3. Save your lodgement confirmation: Once you’ve lodged, keep a copy of the confirmation message for your records. Trust us, future-you will thank you for this. 

If your NFP’s details are out of date [especially if a previous associate can’t be reached], you’ll need to fill out a paper form to update the ABN, which could take up to 12 weeks. So don’t leave it until the last minute! 

 

what about charitable NFPs? 

For those who are operating charitable NFPs, don’t sweat it. If you’re a registered charity, you don’t need to lodge the self-review return. Instead, you’ll stick to the usual process with the ACNC and apply for tax exemption through the ATO. If you’re thinking about restructuring your NFP as a charity, there’s plenty of helpful info on the ACNC and ATO websites to guide you through the process. 

 

By staying on top of these new reporting requirements, your NFP can keep its tax-exempt status safe and sound. 

 

we’re here to help!

We know compliance can feel like a lot, but we’re here to help you keep things simple and stress-free. The ATO has plenty of resources available to walk you through these new rules, but if you need extra support or aren’t sure where to start, give us a buzz on 1300BDEPOT or reach out to our accounting team.

 

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