What is endorsement?
Endorsement is the approval process some not-for-profit (NFP) organisations must follow if they want to access tax concessions.
What are the types of endorsement?
There are two types of endorsement:
- Tax concession charity (TCC) – this type of endorsement is where we approve an organisation to access charity tax concessions such as income exemption, GST concessions and FBT concessions. TCC endorsement is only available to charities registered with the Australian Charities and Not-for-profits Commission (ACNC). If your NFP organisation is a charity that chooses not to register with the ACNC, it cannot apply for endorsement with us. If your NFP organisation is not a charity, this type of endorsement does not apply to your organisation. NFP clubs, societies and associations that are not charities can generally self-assess (that is, work out for themselves) whether they are entitled to tax concessions. TCC endorsement does not entitle an organisation to receive tax-deductible gifts. To access this concession, an organisation must be a DGR.
- Deductible gift recipient (DGR) – this type of endorsement is where we approve an organisation to receive tax-deductible gifts and tax-deductible contributions. If an organisation is endorsed as a DGR, most gifts it receives will be tax-deductible which means the person or organisation that made the gift (the donor) can claim a deduction in their income tax return. Contributions made by individuals to DGRs as part of DGR fundraising events – such as dinners and charity auctions – may also be tax deductible. DGRs that do not need to be endorsed are those listed by name in the tax law.
How do you check if your organisation is endorsed?
If your organisation is endorsed, its endorsement details are recorded on the Australian Business Register (ABR).
You can check if your organisation is endorsed by:
- visiting ABN Lookup at abn.business.gov.auExternal Link – enter your organisation's Australian Business Number (ABN). Information about its endorsement status (if any) is recorded in the sections titled 'Charity tax concession status' and 'Deductible gift recipient status'.
- phoning us on 1300 130 248.
For organisations that are endorsed, it's important to remember that endorsement is not permanent – it needs to be regularly reviewed. Endorsed organisations must notify us in writing if they're no longer entitled to be endorsed.
Is endorsement different to registration?
Endorsement provides an organisation with access to tax concessions. For example, a charity endorsed to access income tax exemption is exempt from paying income tax, removing the need to lodge income tax returns.
If an organisation is registered for a tax, it is generally a payer of that tax. However, endorsement to access tax concessions can often reduce the amount payable. For example, a charity endorsed to access the fringe benefits tax (FBT) rebate is entitled to a rebate (subject to capping thresholds) which reduces the amount of FBT payable.
There will be situations where an organisation is both endorsed and registered for a tax. For example, a charity endorsed to access the goods and services tax (GST) concessions must register for GST if it exceeds the relevant registration turnover threshold.
To receive the practical benefit of some concessions, an organisation must be both endorsed and registered for a tax. For example, a charity endorsed to access GST concessions is entitled to GST credits when it reimburses a volunteer for expenses directly related to the volunteer's activities for the charity. The endorsed charity must also be registered for GST to claim these credits.
Endorsement is an approval process some not-for-profit organisations must follow if they want to access tax concessions. There are two types of endorsement – tax concession charity and deductible gift recipient. If your organisation is endorsed, or wants to be endorsed, you should be aware that endorsement is different to registration.