GST concessions - Tax basics for non-profit organisations

This information is part of our guide Tax basics for non-profit organisations. The information has been updated with changes that have occurred since the publication was released in June 2011.

Introduction

There are a range of goods and services tax (GST) concessions that are available to non-profit organisations. There are additional GST concessions that are available to:

• registered charities that are endorsed to access GST charity concessions
• gift deductible entities
• government schools.

For GST purposes, a gift deductible entity is an entity that can receive tax-deductible gifts or contributions.

For more information about a GST concession, refer to the Charities consultative committee resolved issues document unless directed to another publication.

It is important to check the notes to table 3, as your organisation may need to meet certain requirements before it can access a concession.

Table 3: Available GST concessions

GST concession	Eligible entity	Explanation of concession
Non-profit organisations
Gifts - a gift to a non-profit organisation is not considered payment for a sale.	Non-profit organisation	See Gifts.
School tuck shops - a non-profit organisation may sell food through a tuck shop or canteen at a primary or secondary school and treat the sales as input taxed.	Non-profit organisation	See School tuck shops.
GST registration threshold - the registration turnover threshold is higher for non-profit organisations than for other organisations.	Non-profit organisation	GST registration threshold.
GST groups - the requirement to satisfy the 90% ownership test is waived where the entity is a non-profit organisation and all the other members of the GST group or proposed GST group are non-profit organisations and members of the same non-profit association.	Non-profit organisation	See GST branches, groups and non-profit sub-entities.
Charities, gift deductible entities and government schools
Raffles and bingo - tickets to raffles and bingo sold by an eligible entity are GST-free provided the holding of the raffle or bingo event does not contravene a state or territory law.	Registered charity (1) Gift deductible entity (2) Government school	See Raffles and bingo.
Fundraising events - an eligible entity may choose to treat all sales it makes in connection with certain fundraising events as input taxed.	Registered charity (1) Gift deductible entity (2) Government school	See Fundraising events.
Non-commercial activities - where an eligible entity makes sales and the payment it receives in return for the things it sold is less than a certain amount, the sales are GST-free.	Registered charity (1) Gift deductible entity (2) Government school	See Non-commercial activities.
Accounting on a cash basis - an eligible entity may choose to account on a cash basis regardless of its GST turnover.	Registered charity (1) Gift deductible entity (3) Government school	See Accounting on a cash basis.
Reimbursement of volunteer expenses - an eligible entity can claim GST credits for reimbursements made to volunteers for expenses the volunteer incurs that are directly related to their activities as a volunteer of the entity.	Registered charity (1) Gift deductible entity (2) Government school	See Reimbursement of volunteer expenses.
Gifts and GST credit adjustments - adjustments of GST credits are not required when an item acquired by a business is subsequently gifted to an eligible non-profit entity.	Registered charity (1) Gift deductible entity (4)	See Gifts and GST credit adjustments.
Donated second-hand goods - sales of donated second-hand goods by an eligible entity are GST-free.	Registered charity (1) Gift deductible entity (2) Government school	See Donated second-hand goods.
Non-profit sub-entities - an eligible entity may conduct some of its activities through a non-profit sub-entity, subject to certain exceptions.	Income tax exempt non-profit organisation Registered charity (1) Gift deductible entity (5) Government school	See Non-profit sub-entities.
GST religious groups - some charities can be approved as a GST religious group. Transactions between members of the group are excluded from GST.	Income tax exempt charity	See GST religious groups.
Charitable retirement villages - an eligible non-profit entity may provide GST-free accommodation, accommodation-related services and meals to residents of such retirement villages.	Registered charity (1)	See Charitable retirement villages.

Notes to table 3

Endorsement requirements for charities

1. If a charity wants to access this concession, it must be endorsed by us to access GST charity concessions.

Where an organisation qualifies for a GST concession as both a charity and another type of entity, for example a gift deductible entity, it may access the concession only if the organisation is endorsed to access the GST charity concessions.

For more information, refer to Endorsement requirements for charities and income tax exempt funds.

Gift deductible entities

2. A gift deductible entity that operates a fund, authority or institution which can receive tax-deductible gifts or contributions can only apply this concession to the activities of the endorsed fund, authority or institution, and not to any other activities of the gift deductible entity.
3. A gift deductible entity that operates a fund, authority or institution which can receive tax-deductible gifts or contributions is only entitled to account for GST on a cash basis if it meets one of the general eligibility criteria, either:
• the entity's GST turnover does not exceed the cash accounting turnover threshold
• the entity correctly accounts for income using the receipts method for income tax purposes.
4. If a donor makes a gift to a gift deductible entity that operates a fund, authority or institution which can receive tax-deductible gifts or contributions, the donor will not have to make an adjustment to their GST credit if the gift is made for the principal purpose of the endorsed fund, authority or institution.
5. Only a gift deductible entity that is a non-profit body is able to choose to treat separately identifiable branches as non-profit sub-entity.