If your not-for-profit (NFP) organisation has an active Australian Business Number (ABN), it’s essential to lodge an NFP self-review return to access income tax exemption. This requirement begins with the 2023–24 income year. Read on to learn how to Navigate the NFP Self-Review Return for Tax Exemption in Australia.
Understanding the NFP Self-Review Return
The NFP self-review return helps you evaluate your organisation’s purpose and activities against specific requirements. This evaluation determines your eligibility for income tax exemption, which you report to the Australian Taxation Office (ATO). While completing the self-review return, remember that you won’t pay tax on your income unless your NFP is classified as taxable.
Lodgment Details
For the 2023–24 financial year, you can lodge the NFP self-review return anytime between 1 July and 31 October 2024. You can submit your return online through the ATO’s Online Services for Business, or via a registered tax agent using Online Services for Agents if they are authorised to lodge on your behalf.
Preparing Your NFP for the Self-Review Return
To get ready for the annual self-review return, your organisation’s principal authority needs to:
- Update Contact Details: Ensure that your organisation’s contact details, including ABN registration details, are up to date.
- Review Organisational Purpose and Documents: Reassess the main purpose of your organisation and review its governing documents.
- Set Up myGovID: Establish a myGovID with either a Standard or Strong identity strength.
- Link myGovID to ABN: Link your myGovID to your NFP’s ABN in the Relationship Authorisation Manager (RAM) to access Online Services for Business.
Who is Exempt from Lodging?
- Government Entities and Registered Charities: If your organisation is a government entity or a charity registered with the Australian Charities and Not-for-profits Commission (ACNC), you do not need to lodge an NFP self-review return. Registered charities already submit an annual information statement to the ACNC.
- Taxable Not-for-Profits: These organisations are also exempt from lodging an NFP self-review return as they already file an income tax return or notify the ATO of a return not necessary each year.
- Full list of those not required to prepare a return: Click here.
Importance of Annual Reporting
Annual reporting ensures that only eligible NFPs benefit from income tax exemptions, maintaining transparency and accountability within the community.
Stay Informed
By staying informed and prepared, your NFP can successfully navigate the self-review return process and ensure compliance with tax exemption requirements.
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