GST tips for non-profit organisations

Assets

Asset disposal

Most assets your non-profit organisation sells will be subject to GST; however some will not, for example sales of houses or flats used predominantly for residential accommodation.

If you sell assets such as motor vehicles, property or machinery, you must account for GST on the sale.

This is the case unless you sell the asset for less than 75% of its original cost or for less than 50% of its market value and you are:

• an endorsed charitable institution
• a charitable fund’s endorsed trustee
• a gift deductible entity, or
• a government school.

This means that you do not charge GST on the sale price and you should not issue a tax invoice to the buyer.

For more information about accounting for GST on asset disposal refer to GST and the disposal of capital assets (NAT 7682).

Wrongly issued tax invoices on sales of assets.

If you incorrectly treat a sale as taxable and issue a tax invoice, you must immediately cancel the tax invoice and advise the purchaser.

This situation can often arise when, for example, car dealers accept trade-ins.

For more information refer to GST and motor vehicle trade-ins for charities (NAT 12353).

Last Modified: Thursday, 18 June 2009