Note: This document forms part of our publication Fundraising.
Australian business number (ABN)
Your ABN is your identifier for certain dealings with the Tax Office and other governments and agencies.
Australian Business Register (ABR)
The ABR is a public register that contains details of all Australian business number (ABN) registrations.
Charity
A charity is an institution or fund established for a charitable purpose. Examples of charities include:
- religious institutions
- aged persons homes
- homeless hostels
- primary or secondary schools run by churches
- 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).
Charitable fund
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, see our publication Income tax guide for non-profit organisations (NAT 7967).
Charitable institution
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 document(s) 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, see our publication Income tax guide for non-profit organisations (NAT 7967).
Charitable purpose
A charitable purpose is one which the law regards as charitable. The term 'charitable' has a technical legal meaning that is different from its everyday meaning. Charitable purposes are any of the following purposes:
- the relief of poverty or sickness or the needs of the aged
- the advancement of education
- the advancement of religion
- other purposes beneficial to the community, and
- the provision of child care services on a non-profit basis.
Deductible gift recipient (DGR)
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 as a DGR for the operation of a fund, authority or institution that it owns or includes.
For the second type, only gifts to the fund, authority or institution are tax deductible.
For more information on DGRs, see our publication GiftPack (NAT 3132).
Endorsement
Endorsement is the process under which organisations apply to the Tax Office for approval to:
Fringe benefits tax (FBT)
FBT is a tax payable by employers who provide fringe benefits to their employees or associates of their employees. For example, a fringe benefit is provided when an employer:
- allows an employee to use a work car for private purposes
- gives an employee a cheap loan, or
- pays an employee's private health insurance costs.
Goods and services tax (GST)
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.
GST credit
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 included in the price you paid on an import, if it is for use in your business or enterprise, but not 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).
GST-free sales
You do not include GST in the price of GST-free sales that you make, but you are entitled to GST credits for things you have purchased or imported that relate to making the GST-free sales. Examples of GST-free sales include:
- basic food
- exports
- sewerage and water
- the sale of a business as a going concern
- non-commercial activities of charities, and
- most education and health services.
Health promotion charity
A health promotion charity is a non-profit charitable institution whose principal activity is promoting the prevention or control of diseases in human beings. The characteristics of a health promotion charity are:
- its principal activity is promoting the prevention or the control of diseases in human beings, and
- it is a charity that is a charitable institution.
Examples of activities that can promote the prevention or control of disease include:
- providing relevant information to sufferers of a disease, health professionals, carers and to the public
- researching how to detect, prevent or treat diseases, and
- developing or providing relevant aids and equipment to sufferers of a disease.
For more information on health promotion charities, see our publication GiftPack (NAT 3132).
Non-profit
An organisation is non-profit for determining income tax exempt status 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.
Input taxed sales
You do not include GST in the price of input taxed sales you make, but neither are you entitled to GST credits for things you have purchased or imported that relate to making those input taxed sales. In some cases, you may be entitled to claim reduced GST credits. Examples of input taxed sales include:
- most financial supplies, and
- supplies of residential rent and residential premises.
Public benevolent institution (PBI)
A PBI is a non-profit institution organised for the direct relief of poverty, sickness, suffering, distress, misfortune, disability or helplessness. The characteristics of a PBI are:
- it is set up for needs that require benevolent relief
- it relieves those needs by directly providing services to people suffering them
- it is carried on for the public benefit
- it is non-profit
- it is an institution, and
- its dominant purpose is providing benevolent relief.
Examples of PBIs are organisations that:
- provide hostel accommodation for the homeless
- treat sufferers of disease
- provide home help for the aged and the infirm
- transport the sick or disabled, or
- rescue people who are lost or stranded.
For more information on PBIs, see our publication GiftPack (NAT 3132).
Last Modified: Tuesday, 28 August 2012