Self-review return requirement
Starting from the income year 2023/24, not-for-profit organisations (NFPs) that are not registered with the ACNC must self-assess their eligibility for income tax exemption and lodge an annual NFP self-review return with the ATO.
NFPs with only charitable purposes that meet the legal definition of a charity must be registered with the ACNC and be endorsed by the ATO to be income tax exempt. NFPs with solely charitable purposes that choose not to register with the ACNC are not eligible to self-assess as income tax exempt and will not exempt from income tax.
In general, an organisation is eligible to be registered with the ACNC if it is not-for-profit, has only charitable purposes that are for the public benefit and set out in the Charities Act, and does not have any disqualifying purposes such as engaging in or promoting activities that are unlawful or contrary to public policy, and promoting or opposing a political party.
The NFP self-review return requires NFPs to specify the type of exempt category the NFP is self-assessing against, and provides guidelines for considering their purposes and activities against specific eligibility requirements under 1 of 8 income tax exempt categories. These categories include community service, sporting, cultural, educational, health, employment, scientific and resource development.
For organisations with an income year ending 30 June, the 2023/24 NFP self-review return is due by 31 October 2024. If an NFP has an ATO approved substituted accounting period and an income year that is not ended on 30 June, it will need to follow specific due dates provided by the ATO.
NFPs can lodge NFP self-review returns using ATO's online services or engaging a registered tax agent. The NFP self-review return does not include financially related questions, except it asks for an estimate of gross revenue range as small, medium or large, to indicate the size of the NFP organisation.
After the first NFP self-review lodgement, NFPs will need to confirm or update information on a pre-populated return each year. Penalties may apply if an NFP self-review return is not lodged by the due date each year.
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Advantage NFP
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