As part of the 2021-22 federal budget, the Australian Government announced reforms to the administration of not-for-profit (NFP) entities that self-assess as income tax exempt. The measure is designed to enhance trust and confidence in the sector by ensuring only eligible NFPs access income tax exemptions, and that NFPs operate on a level playing field.
The changes came into effect on 1 July 2023, meaning that non-charitable NFPs with an active Australian Business Number (ABN) are now required to lodge an annual self-review return in order to access an income tax exemption.
The annual self-review return for the 2023–24 year will be required to be lodged between July and October 2024 using the existing online and secure platform – Online Services for Business and Online Services for Agents.
The ATO has published guidance on how to prepare a NFP self-review return. Non-charitable NFPs can now see the NFP self-review return questions so they can prepare their answers before the return is available on 1 July 2024.
Affected non-charitable NFPs include community services, sporting (clubs and associations), cultural, educational, health, employment, scientific, and resource development organisations.
If you have any questions about your NFP or its tax status, feel free to contact us on 03 5331 2333.