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.

For more information on consolidation, refer to the Consolidation Reference Manual.

Last Modified: Monday, 4 June 2007