GST concessions for charities, gift deductible entities and government schools - 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. The information in this document has been updated for changes that have occurred since the publication was released in June 2007.

Introduction

In addition to the GST concessions that are available to non-profit organisations (see GST concessions for non-profit organisations), there are other GST concessions that are available to:

• charitable institutions and charitable funds that are endorsed to access GST charity concessions
• gift deductible entities, and
• government schools.

It is important to check the notes to the table, as your organisation may need to meet certain requirements before it can access a concession.

GST concession	Eligible entity	Explanation of concession
Raffles and bingo – tickets to raffles and bingo sold by an eligible entity are GST-free provided the holding of the raffle or bingo event does not contravene a state or territory law.	Charitable institution (1) Charitable fund (1) Gift deductible entity (2) Government school	See Raffles and bingo.
Fundraising events – an eligible entity may choose to treat all sales it makes in connection with certain fundraising events as input taxed.	Charitable institution (1) Charitable fund (1) Gift deductible entity (2) Government school	See Fundraising events.
Non-commercial activities – where an eligible entity makes sales and the payment it receives in return for the things it sold is less than a certain amount, the sales are GST-free.	Charitable institution (1) Charitable fund (1) Gift deductible entity (2) Government school	See Non-commercial activities
Accounting on a cash basis – an eligible entity may choose to account on a cash basis regardless of its GST turnover.	Charitable institution (1) Charitable fund (1) Gift deductible entity (3) Government school	See Accounting on a cash basis
Reimbursement of volunteer expenses – an eligible entity can claim GST credits for reimbursements made to volunteers for expenses the volunteer incurs that are directly related to their activities as a volunteer of the entity.	Charitable institution (1) Charitable fund (1) Gift deductible entity (2) Government school	See Reimbursement of volunteer expenses
Gifts and GST credit adjustments – adjustments of GST credits are not required when an item acquired by a business is subsequently gifted to an eligible entity.	Charitable institution (1) Charitable fund (1) Gift deductible entity (4)	See Gifts and GST credit adjustments.
Donated second-hand goods – sales of donated second hand goods by an eligible entity are GST-free.	Charitable institution (1) Charitable fund (1) Gift deductible entity (2) Government school	See Donated second-hand goods
Non-profit sub-entities – an eligible entity may conduct some of its activities through a non-profit sub-entity.	Income tax exempt non-profit organisation Charitable institution (1) Charitable fund (1) Gift deductible entity (5) Government school	See Non-profit sub-entities.
GST religious groups – some charities can be approved as a GST religious group. Transactions between members of the group are excluded from GST.	Income tax exempt charity	See GST religious groups.
Charitable retirement villages – an eligible entity may provide GST-free accommodation, accommodation related services and meals to residents of such retirement villages	Charitable institution (1) Charitable fund (1)	See Charitable retirement villages.

Notes to table

Endorsement requirements for charities

1. If a charity wants to access this concession, it must be endorsed by the Tax Office to access GST charity concessions.
   
   Where an organisation qualifies for a GST concession as both a charity and another type of entity, for example a gift deductible entity, it may access the concession only if the organisation is endorsed to access the GST charity concessions.
   
   For more information, see Endorsement requirements for charities and income tax exempt funds.

Gift deductible entities

2. A gift deductible entity that operates a fund, authority or institution which can receive tax deductible gifts or contributions can only apply this concession to the activities of the endorsed fund, authority or institution, and not to any other activities of the gift deductible entity.
3. A gift deductible entity that operates a fund, authority or institution which can receive tax deductible gifts or contributions is only entitled to account for GST on a cash basis if it meets one of the general eligibility criteria. Those criteria are:
• The entity’s GST turnover does not exceed the cash accounting turnover threshold, or
• For income tax purposes the entity correctly accounts for income using the receipts method.
4. If a donor makes a gift to a gift deductible entity that operates a fund, authority or institution which can receive tax deductible gifts or contributions, the donor will not have to make an adjustment to their GST credit if the gift is made for the principal purpose of the endorsed fund, authority or institution.
5. Only a gift deductible entity that is a non-profit body is able to choose to treat separately identifiable branches as non-profit sub-entity.