Who should use this guide

Warning:

This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

End of attention

You should use this guide if you are a financial officer, tax professional or other person involved in the administration of a taxable NFP organisation.

For this guide to apply to your organisation, your organisation must be both:

• not-for-profit
• taxable.

For examples of the types of organisations covered by this guide, see the Industry codes table.

Not-for-profit

The basic premise of a NFP organisation is that it is not operating for the profit or gain of its individual members, whether these gains are direct or indirect. This applies both while the organisation is operating and when it winds up.

Any profit made by the organisation goes back into the operation of the organisation to carry out its purposes and is not distributed to any of its members.

We accept an organisation as NFP where its constituent or governing documents prevent it from distributing profits or assets for the benefit of particular people. These documents should contain acceptable clauses showing the organisation’s NFP character. The organisation’s actions must be consistent with this requirement.

See also:

• Examples of clauses that indicate NFP character – Mutuality and taxable income

Taxable

NFP organisations can be either exempt or taxable.

Many NFP organisations are taxable and may need to lodge tax returns and pay income tax.

Put simply, if your NFP organisation is not exempt from income tax, it is taxable. Only certain types of NFP organisations are exempt from income tax.

See also:

• If your NFP organisation is taxable or exempt – Do you have to pay income tax?

Organisations not covered

This guide does not cover:

• partnerships
• strata-title bodies corporate
• friendly societies
• life assurance companies
• life insurance companies
• mutual insurance companies
• credit unions.