• Grants and sponsorship

    Grants

    If your organisation is registered for GST – or required to be – and receives grant funding (from a government body or private foundation, for example), it does not have to pay GST on the funding payment unless it makes a 'supply' in return for the payment.

    Sponsorship

    Under a sponsorship arrangement, when an organisation undertakes a fundraising activity, it often receives support in the form of money. In return, it may provide such things as advertising, signage, naming rights or some other type of benefit of value.

    This means that the sponsor receives something of value in return for the sponsorship, so the sponsorship payment is not a gift.

    If the organisation is registered for GST, it has to pay GST on the sponsorship it receives. On the other hand, the sponsor may be able to claim a GST credit.

    See also:

    Last modified: 16 Jun 2015QC 22428