Most assets your non-profit organisation sells will be subject to GST; however some will not, for example sales of houses or flats used predominantly for residential accommodation.
If you sell assets such as motor vehicles, property or machinery, you must account for GST on the sale.
This is the case unless you sell the asset for less than 75% of its original cost or for less than 50% of its market value and you are either:
- an endorsed charitable institution
- a charitable fund’s endorsed trustee
- a gift deductible entity
- a government school
- a non-profit sub-entity of one of the above.
This means that you do not charge GST on the sale price and you should not issue a tax invoice to the buyer.
Wrongly issued tax invoices on sales of assets
If you incorrectly treat a sale as taxable and issue a tax invoice, you must immediately cancel the tax invoice and advise the purchaser.
This situation can often arise when, for example, car dealers accept trade-ins.