• Non-commercial activities

    The non-commercial activities of some non-profit organisations are GST-free. These non-profit organisations include:

    • endorsed charitable institutions
    • endorsed trustees of charitable funds
    • gift deductible entities
    • government schools
    • non-profit sub-entities of one of the above.

    As one of these organisations, your non-commercial activities may include selling goods or services for less than cost or less than market value. Your sale is GST-free if the amount charged is less than either:

    • 50% of the GST-inclusive market value of the good or service
    • 75% of the amount you paid to purchase the good or service that you then sell.

    When the sale is a supply of accommodation by any of these organisations, the sale is GST-free if the amount charged is either:

    • less than 75% of the GST-inclusive market value of the accommodation
    • less than 75% of the cost of providing the accommodation.

    You may also be able to claim GST credits for the GST included in the price of purchases to make these sales.

    GST applies to most of the commercial activities of these non-profit organisations. GST may not apply to some activities for other reasons. For example, many health and education sales are GST-free and sales made in connection with some fund-raising events conducted by charities are input taxed.

    Further information

    For more information about non-commercial activities and how to work out whether your non-commercial supplies are GST-free, refer to:

    End of further information

    Treating related party transactions as GST-free

    There can be problems with arrangements where related or associated non-profit organisations have claimed GST credits for input taxed supplies of accommodation. External Link Lease by a charitable institution to an associated endorsed charitable institution designed to gain input tax credits outlines an example of an arrangement which we consider gives rise to taxation issues.

    We have released a determination detailing the GST consequences of the type of arrangement outlined in Taxpayer Alert TA 2007/1.

    Further information

    For more information, refer to External Link Goods and services tax: what are the results for GST purposes of a charitable institution engaging with an associated endorsed charitable institution in an arrangement described in Taxpayer Alert TA 2007/1?

    End of further information
      Last modified: 07 Jun 2013QC 21235