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Note: This document forms part of our publication GiftPack.
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Your ABN is your identifier for certain dealings with the Tax Office and other government departments and agencies.
Your ABN registration details become part of the ABR, which we maintain for all Commonwealth purposes. The publicly available information on this register will allow people to find out whether the entities they are dealing with have an ABN, are registered for GST, or are endorsed as deductible gift recipients.
A charitable fund is a fund established under an instrument of trust or a will for a charitable purpose. The purposes set out in the will or instrument of trust must be charitable. Charitable funds mainly manage trust property, and/or hold trust property to make distributions to other entities or persons. In contrast, if the trustee mainly carries on activities that are charitable, the fund will be treated as a charitable institution and not as a charitable fund.
For more information on charitable funds, refer to our publication Income tax guide for non-profit organisations (NAT 7967).
A charitable institution is an institution that is established and run to advance or promote a charitable purpose. An organisation’s purposes can be found in its governing documents and from its activities, history and control. A charitable institution will carry on charitable activities while a charitable fund mainly manages, and/or holds trust property.
For more information on charitable institutions, refer to our publication Income tax guide for non-profit organisations (NAT 7967).
Charitable purposes are those which the law regards as charitable. The term ‘charitable’ has a technical legal meaning, which is different from its everyday meaning. Charitable purposes are:
- the relief of poverty or sickness or the needs of the aged
- the advancement of education
- the advancement of religion
- the provision of child care services on a non-profit basis, and
- other purposes beneficial to the community.
A charity is an institution or fund established for a charitable purpose.
Examples of charities include:
- religious institutions
- aged persons’ homes
- homeless hostels
- organisations relieving the special needs of people with disabilities, and
- societies that promote the fine arts.
For more information on charities, see our publication Income tax guide for non-profit organisations (NAT 7967).
A DGR is an organisation that is entitled to receive income tax deductible gifts. All DGRs have to be endorsed by the Tax Office, unless they are listed by name in the income tax law. There are two types of endorsement:
- where an organisation is endorsed as a DGR as a whole, or
- where an organisation is endorsed for the operation of a fund, authority or institution it owns or includes.
For the second type, only gifts to the fund, authority or institution are tax deductible.
Endorsement is the process under which organisations apply to the Tax Office for approval to:
For the purposes of this publication, an entity means an individual, a body corporate, a corporation sole, a body politic, a partnership, an unincorporated association or body of persons, a trust or a superannuation fund.
In addition, the trustee of a trust or superannuation fund is taken to be an entity consisting of the person or persons who are trustee(s) at the time. That entity is a different entity to the person acting in their personal capacity. If reference is made to an entity of a particular kind (for example, trustee), it refers to the entity only in its capacity as that kind of entity.
GST is a broad-based tax of 10% on the supply of most goods, services and anything else consumed in Australia and the importation of goods into Australia.
A GST credit is what you claim to get back the GST you pay in the price of goods and services you purchase for your business or enterprise. You are entitled to a GST credit for the GST included in the price you pay for a purchase, or the GST paid on an import, if it is for use in your business or enterprise. However, you are not entitles to a credit to the extent that you use the purchase or import to make input taxed sales, or if the purchase or import is of a private or domestic nature. You must have a tax invoice before you can claim a GST credit on your activity statement (except for purchases of $75 or less excluding GST).
An organisation is non-profit if it is not carried on for the profit or gain of its individual members. This applies for direct and indirect gains, and both while the organisation is being carried on and on its winding up. The Tax Office accepts an organisation as non-profit if its constitution or governing documents prohibit distribution of profits or gains to individual members and its actions are consistent with the prohibition.
Certain non-profit organisations, with independent branches (units), have the option of treating their units as if they were separate entities for GST purposes and not part of the main organisation. For DGR endorsement, it is the main organisation and not the non-profit sub-entity that must apply.
PAYG withholding requires an organisation to withhold an amount if it makes certain payments. These include salary, wages, commission, bonuses or allowances to an employee, directors’ fees, payments for a supply (goods or services) to another business which does not quote an ABN, and certain dividend, interest and royalty payments.
Last Modified: Monday, 11 February 2008
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