Endorsement requirements for charities and income tax exempt funds - 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.

Introduction

Charities and income tax exempt funds must be endorsed by the Tax Office to be exempt from income tax.

Charities also need to be endorsed if they want to access charity concessions under the goods and services tax (GST) and fringe benefits tax (FBT) laws.

An organisation’s endorsement details are recorded on the Australian Business Register at www.abr.business.gov.au

The following information is publicly available on the register:

• the organisation’s entity type – charitable fund, charitable institution, public benevolent institution, health promotion charity or income tax exempt fund
• the tax concessions the organisation has been endorsed to access, and
• the date of effect for each endorsement.

Applying for endorsement

Before an organisation can apply for endorsement it must have an Australian Business Number (ABN).

If your organisation does not have an ABN see How does your organisation apply for an ABN?. If you indicate on the ABN application that your organisation wants to be endorsed as a tax concession charity (TCC) or income tax exempt fund (ITEF), the Tax Office will post you a TCC/ITEF endorsement application pack.

If your organisation already has an ABN, you can obtain a TCC/ITEF endorsement application pack by:

• downloading the application pack or,
• phoning the Tax Office on 1300 130 248

Using the form in the application pack you can apply to the Tax Office to access one or more of the following tax concessions:

• income tax exemption
• GST charity concessions
• FBT rebate
• FBT exemption

For more information refer to: The endorsement process to access charity tax concessions (NAT 3192) The endorsement process for income tax exempt funds To obtain these publications, see More information.

Endorsement is different to registration

Endorsement provides an organisation with access to concessions. For example, an organisation that is endorsed to access income tax exemption is exempt from paying income tax, removing the need to lodge income tax returns.

If an organisation is registered for a tax, it is generally a payer of that tax. However, endorsement to access tax concessions can often reduce the amount payable. For example, a charity that is endorsed to access the FBT rebate is entitled to a 48% rebate equal to the gross FBT payable (subject to capping thresholds).

There will be situations where an organisation is both endorsed and registered for a tax. For example, a GST endorsed charity that exceeds the relevant registration turnover threshold must register for GST.

To receive the practical benefit of some charity concessions a charity must be endorsed and registered for a tax. For example, a charity that is endorsed to access GST charity concessions is entitled to GST credits when it reimburses a volunteer for expenses directly related to the volunteer’s activities for the charity. The endorsed charity must also be registered for GST in order to claim these credits.

Tax deductible gifts

Being endorsed as a TCC or ITEF does not entitle an organisation to receive tax deductible gifts.

There is a separate endorsement process for organisations seeking deductible gift recipient status – see Fundraising.

Last Modified: Wednesday, 6 June 2007