The income tax law provides that certain types of charities and non-profit clubs, societies and associations are exempt from paying income tax. Most of such entities are not automatically exempt. There is an endorsement process for charities and certain tax exempt funds. To find out about this process contact the Australian Tax Office on 1300 130 248 or check out the ATO website.
A non-profit organisation does not necessarily need to have charitable status in order to be exempt from paying income tax. Some non-profit organisations that are not charities can self-assess their income tax exemption but in practice it is always desirable that you seek ATO approval for your exemption so as to minimise the risk of penalties etc. For example, certain types of clubs, societies and associations can be exempt from income tax. Below is a list of the types of organisation that may be exempt from income tax:
- Community service organisations
- Cultural organisations
- Educational organisations
- Employment organisations
- Health organisations
- Religious organisations
- Resource development organisations
- Scientific organisations
- Sporting organisations
If you are income tax exempt you do not need to pay income tax or lodge income tax returns (unless specifically requested). Further information on income tax exemptions can be found on the PilchConnect website.
To work out if your organisation is exempt from income tax contact the ATO on 1300 130 248 or check out the ATO website.