• Grants, gifts and sponsorship

    Grants

    Non-profit organisations that are registered for GST must pay GST if, in exchange for the grant, they either:

    • sell goods and services (or anything else)
    • enter into a binding obligation with the grant provider to do something, such as provide services to the community.

    However, GST does not have to be paid if the sale in exchange for the grant is GST-free or input taxed.

    Further information

    For more information about how GST applies to grants, refer to:

    • Grant funding in Fundraising 
    • Part 5 – Grants in Charities consultative committee resolved issues document 
    • Goods and services tax: grants of financial assistance.
    End of further information

    Gifts

    Non-profit organisations are not required to pay GST on gifts they receive and the value of gifts is not included when they determine their GST turnover.

    For a payment (monetary or non-monetary) to be considered a gift, it must be made voluntarily, and the giver cannot receive a material benefit in return.

    A material benefit is something of value, such as a ticket to a dinner or a functional item such as a pen or book.

    Further information

    For more information about how GST applies to gifts, refer to:

    End of further information

    Sponsorship

    Sponsorship payments are not gifts. This is because your organisation would normally provide a sponsorship benefit for the payment – for example, advertising.

    Under a sponsorship arrangement, you may receive monetary support for a fundraising activity, and in return you provide advertising, signage, naming rights or other benefits to your sponsor.

    If you are registered for GST, you must pay GST on any sponsorship you receive.

    Further information

    For more information about how GST applies to sponsorship, refer to:

    End of further information
      Last modified: 07 Jun 2013QC 21235