A non-profit organisation does not operate for the profit or gain of its members (directly or indirectly). Any profit made by a non-profit organisation goes directly back into the organisation; it is not distributed to any of its members.
This applies while the organisation is operating, and when it winds up.
Some GST concessions apply to non-profit organisations generally, however some only apply to charities and gift-deductible entities.
What is a charity?
A charity is an institution or fund established for a charitable purpose, such as poverty relief.
To receive GST concessions:
the charity’s sole purpose should be charitable, and
the charity must be endorsed - by us - as a charity for tax purposes.
A gift-deductible entity is an organisation that can receive tax-deductible gifts or contributions.
For more information on gift-deductible entities, refer to GiftPack (NAT 3132).
Most non-profit organisations registered for GST can access GST concessions, however, some concessions apply only to charities and gift-deductible entities.
Non-profit sub-entities
Some non-profit organisations can choose to have some or all of their branches or units treated as separate entities (non-profit sub-entities) for GST purposes. They include:
endorsed charitable institutions
charitable funds where the trustee is endorsed
gift-deductible entities
government schools, and
some other income tax-exempt non-profit organisations.
Branches or units can only be treated as non-profit sub-entities only if their activities are separately identifiable from those of the main entity with reference to either the nature of the activities or the location of the activities.
The branch or unit must also have an independent accounting system.
If the branch or unit has activities that directly relate to the main purpose of the non-profit organisation, such as providing membership services for the main branch, it cannot be treated as a non-profit sub-entity.
For more information about non-profit sub-entities, refer to:
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