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In June 2011, we released our guide Tax basics for non-profit organisations (NAT 7966). This addendum details the changes that have occurred since then.
The changes are:
- The introduction of the Australian Charities and Not-for-profits Commission (ACNC)
- Extending GST concessions to non-profit sub-entities.
1. Australian Charities and Not-for-profits Commission
From 3 December 2012, there is a new national regulator for charities, the Australian Charities and Not-for-profits Commission (ACNC).
The ACNC registers organisations as charities. Registration as a charity is voluntary. However, your organisation must be registered with the ACNC to access any tax concessions available to charities (see Table 1) from the Australian Taxation Office (ATO). As part of its status determinations, the ACNC also decides whether a charity is a type of charity, such as public benevolent institutions (PBIs) or health promotion charities (HPCs).
If your organisation was endorsed by the ATO as a charity to access charity tax concessions immediately before 3 December 2012, your organisation is automatically registered with the ACNC and you do not have to re-register. Find out more about the ACNC registration process at www.acnc.gov.au
Throughout the publication, wherever the terms charitable fund and charitable institution are used, replace with registered charity.
In Chapter 1, make the following changes:
Under the heading Tax concessions - an overview (page 3), in the third paragraph, replace the first dot point with:
- registered charities - including registered public benevolent institutions and registered health promotion charities.
Replace Table 1 (page 4) with the following table.
Tax concessions
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Types of non-profit organisations
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Registered public benevolent institutions
and
Registered health promotion charities
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Registered charities
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Income tax exempt funds
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Other non-profit organisations
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Income tax exemption - see page 10
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 1
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1
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1
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Certain types only 2
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FBT exemption (subject to capping threshold) - see page 24
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1
|
|
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Certain types only 3
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FBT rebate - see page 25
|
|
8
|
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Certain types only 4
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GST concessions for charities and gift deductible entities - see page 15
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1
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1
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5
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Certain types only 5
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GST concessions for non-profit organisations - see page 15
|
|
|
|
|
Deductible gift recipients - see page 30
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6
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Certain types only 6
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6
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Certain types only 6
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Refunds of franking credits - see page 12
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7
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7
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7
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 Certain types only 7
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Add the following note to Notes to table 1 (page 4):
8. The organisation must be endorsed by us to access this concession. Not all registered charities are eligible for this concession - see FBT rebate.
Under the heading Types of non-profit organisations (page 5), replace the second paragraph with:
Replace diagram 1 (page 5) with:
Delete the following headings and content (pages 5 and 6):
- Charities
- Charitable funds
- Charitable institutions
- Public benevolent institutions
- Health promotion charities
And replace with:
Charities
ACNC registration is a prerequisite for charities including PBIs and HPCs to access charity tax concessions. For information on these entities, refer to the information on our website:
Visit www.ato.gov.au and type in the quick code (QC) number to find this information quickly. You can also find information on the definition of charity, PBI and HPC on the ACNC's website www.acnc.gov.au
Under the heading Registering your organisation (page 7), at the end of paragraph 1, add the following paragraph:
Charities, including PBIs and HPCs, need to be registered with the ACNC to access charity tax concessions.
Under the heading Who is entitled to an ABN? (page 7), at the second set of dot points, replace 'a charitable institution' and 'a trustee of a charitable trust' with:
delete a religious institution
Under the heading Endorsement requirements for charities and income tax exempt funds (page 8) add the word 'registered' before the word charities wherever it occurs.
Under the heading Applying for endorsement (pages 8 and 9), replace all text with:
Before an organisation can apply for endorsement it must have an Australian business number (ABN). If your organisation is a charity, you must also be registered with the ACNC to apply for endorsement to access charity tax concessions.
If your organisation does not have an ABN, see Registering your organisation (page 7).
If your organisation is a charity and is not registered with the ACNC, visit www.acnc.gov.au
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If your organisation is registered with the ACNC, you can apply directly to the ATO to be endorsed to access charity tax concessions. For more information refer to:
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In Chapter 2, make the following changes:
Under the heading Income Tax Exemption (page 10), delete the dot point:
Replace charities with registered charities in the following instances:
Replace charity with registered charity under the heading Refunds of Franking Credits, the first dot point in the fifth paragraph.
In Chapter 3, make the following changes:
Under the heading GST concessions (page 15), replace the first dot point with:
- Registered charities that are endorsed to access GST charity concessions
Throughout Chapter 3, including Table 3, wherever the terms charitable fund and charitable institution are used, replace with registered charity.
In Chapter 4, make the following changes:
Under the heading Reportable fringe benefits (page 23), replace the first dot point in the fifth paragraph with:
- capping thresholds that apply to registered public benevolent institutions, registered health promotion charities, hospitals and public ambulance services
At the end of note 3 in Table 4 (page 24), add the following sentence:
In addition to our endorsement, PBIs and HPCs need to be registered with the ACNC to access the FBT exemption.
Under the heading FBT rebate (page 25), at the end of the fourth paragraph, add the following:
In addition to our endorsement, charities, including religious institutions, need to be registered with the ACNC to access the FBT rebate. The FBT rebate is only available to registered charities that are institutions.
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The FBT rebate is not available to:
- Registered charities that are funds.
- Registered charities that are institutions established by a law of the Australian Government, a state or a territory. Examples are public universities, public museums and public art galleries.
- Registered public benevolent institutions and registered health promotion charities - these organisations are eligible for the FBT exemption.
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Under the heading Religious institutions (page 25), in this bulleted list:
Religious institutions may also be eligible for FBT concessions for benefits they provide to:
- religious practitioners
- live-in carers
- domestic employees.
Add the following text after the list:
To access these concessions, an entity must be registered with the ACNC as a charity with a purpose that is the advancement of religion.
In Chapter 5, add the word 'registered' before the term health promotion charities and the term public benevolent institutions wherever occurring.
In the Definitions section add the following definition:
Registered charity
Registered charity means an entity that is registered with the Australian Charities and Not-for-profits Commission (ACNC).
2. GST and non-profit sub-entities
From 1 July 2011, a non-profit sub-entity can access the same GST concessions as their parent entity (other than the ability to create further non-profit sub-entities).
In Chapter 3, add the following text:
In Table 3: Available GST concessions continued (page 16), in the Non-profit sub-entities section in the fourth row, replace the text:
Non-profit sub-entities - an eligible entity may conduct some of its activities through a non-profit sub-entity.
with:
Non-profit sub-entities - an eligible entity may conduct some of its activities through a non-profit sub-entity, subject to certain exceptions.
Under the heading GST registration threshold (page 17), at the end of the 2nd paragraph, add the following sentence:
All non-profit sub-entities are entitled to the $150,000 GST registration turnover threshold regardless of whether their parent entity is a non-profit body or not - see Non-profit sub-entities (page 19).
Under the heading Non-profit sub-entities, (pages 19-20), at the end of the 8th paragraph (page 20), add the following sentence:
Under the heading Non-profit sub-entities, (pages 19-20), at the end of the 9th paragraph (page 20), add the following two paragraphs:
A non-profit sub-entity of an eligible entity cannot make the choice to create further non-profit sub-entities.
For those GST concessions that require a choice to be made, the non-profit sub-entity of an eligible entity can choose to access the concession even if the parent entity has chosen not to apply the concession to its own activities.
Last Modified: Tuesday, 4 December 2012