Registering for GST and other taxes
Your not-for-profit (NFP) organisation may need to register for goods and service tax (GST), fringe benefits tax (FBT), pay as you go withholding (PAYG), and other taxes. You can apply for these registrations when you apply for your ABN, or you can apply for them at a later date.
GST is a broad-based tax of 10% on the sale of most goods, services and anything else consumed in Australia.
Your NFP organisation must register for GST if its GST turnover is $150,000 or more. If your organisation's GST turnover is less than $150,000, registering is optional.
GST is a tax on transactions. If an NFP organisation is registered (or required to be registered) for GST, it generally incudes GST in the price of most goods and services and anything else it sells. Similarly, the organisation may be entitled to claim GST credits on the purchases it makes in carrying out its activities.
Registering as a non-profit sub-entity
Charities, deductible gift recipients, government schools and certain other NFP organisations that are registered for GST may choose to register a branch as a non-profit sub-entity. A non-profit sub-entity maintains an independent system of accounting, is separately identifiable by its activities or location, and is referred to in the entity’s records as a separate entity for GST purposes.
For example, units of your organisation that are non-profit sub-entities could include a branch, fete, lamington drive or fundraising dinner. This means that where the unit’s GST turnover is less than $150,000, the unit can choose whether it registers for GST or not. Where the unit has a GST turnover of $150,000 or more, it must register separately for GST purposes and will have the same rights and obligations as other GST registered entities.
ABN registration as a non-profit sub-entity for GST purposes cannot be used by the sub-entity for any other purpose, for example, to apply for endorsement as a DGR.
Example – non-profit sub-entity's use of its ABN
A school is constituted as a company and also operates a public library. The school has an ABN and the library also applies for an ABN for GST purposes as it meets the requirements of a non-profit sub-entity.
The library cannot apply for endorsement as a DGR in its own right. The school will have to apply for endorsement in relation to the library. The library, however, can use its ABN for GST purposes.
End of example
Your organisation must register for PAYG withholding if you need to withhold an amount from a payment and send it to us. The most common payments you need to withhold amounts from are payments you make to:
- your employees
- your directors
- businesses that do not quote their ABN to you.
Depending on your circumstances, you may also have to withhold amounts from payments you make to:
- contractors who have a voluntary agreement with you
- individuals under a labour hire arrangement
- employees on termination of their employment.
Pay as you go withholding
Your organisation must register for FBT once you have established that it is providing fringe benefits and that it has to pay FBT.
FBT is a tax payable by employers who provide fringe benefits to their employees or to associates of their employees. This is the case whether or not the employer is the actual supplier of the benefit – for example, where the benefit is provided by an associate, or under an arrangement with a third party.
Some common fringe benefits are:
- private use of a work car by an employee or director
- paying private expenses for an employee or director – for example
- health insurance costs
- club memberships
- school fees
- holiday expenses
- on-site accommodation.
If your organisation provides a fringe benefit to its employees or to associates of its employees (typically family members), your organisation may have an FBT liability. This is separate from income tax and is calculated on the taxable value of the fringe benefits provided. Even if your organisation is exempt from income tax, it may still have to pay FBT. However, certain FBT concessions can reduce your organisation's liability.
Fringe benefits tax
A TFN is a unique number we give you to help us manage tax and other government services. It is not compulsory to have a TFN. However, a TFN will help if you:
- are required to lodge an income tax return for your organisation
- lodge an application for refund of franking credits for your charity or deductible gift recipient
- ask us about your organisation's income tax affairs.
Fuel tax credits
Fuel tax credits are a credit for the fuel tax (excise or customs duty) included in the price of the fuel you use for your organisation's activities in:
- heavy vehicles*.
* Vehicles with a gross vehicle mass (GVM) greater than 4.5 tonnes – diesel vehicles acquired before 1 July 2006 can equal 4.5 tonnes GVM.
Some fuels and activities are not eligible including aviation fuels and fuel you use in light vehicles of 4.5 tonnes GVM or less, travelling on public roads (such as cars, utes and taxis).
Before you can claim fuel tax credits your organisation must be registered for both GST and fuel tax credits.
How to register for GST and other taxes
If your organisation is applying for an ABN, you can register for GST, FBT or PAYG withholding, fuel tax credits or a TFN by selecting these options on the ABN application form.
If your organisation already has an ABN:
Your not-for-profit organisation may need to register for goods and service tax (GST), fringe benefits tax (FBT), pay as you go withholding (PAYG), and other taxes. You can apply for these registrations when you apply for your ABN, or you can apply for them at a later date.