Consolidation - Tax basics for non-profit organisations
Note: This document forms part of our publication Tax basics for non-profit organisations. To view the full publication, click here.
Wholly-owned corporate groups may have the option of consolidating for income tax. Consolidation is optional but irrevocable. The consolidated group operates as a single entity for income tax purposes, lodging a single income tax return and then paying a single set of PAYG instalments.
When a group consolidates, it is a ‘one in, all in’ situation, in which all of the head company’s eligible wholly-owned subsidiary members become part of the group.
The following entities (which receive special tax treatment compared with ordinary Australian-resident companies) cannot be a head company or subsidiary member of a consolidated group:
exempt entities (that is, total ordinary and statutory income is exempt)
pooled development funds
film licensed investment companies, or
certain credit unions.
Other entities specifically excluded from being a subsidiary member of a consolidated group:
non-profit companies
trusts that are complying and non-complying superannuation entities, and
trusts that are non-complying approved deposit funds.
While a non-profit company can be the head company of a consolidated group, it cannot be a subsidiary member.
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