Income tax exemption and sporting clubs

A guide for office bearers and advisers of non-profit clubs for self-assessing if their club is exempt from income tax.

• To qualify for exemption
• Self-assessment
• How I can tell if my sporting club can be tax exempt
• The main purpose of a club
• The 3 tests

To qualify for exemption

Your sporting organisation will be exempt from income tax, and can self-assess its exemption, if it is not a charity and meets all of the following requirements:

• it is a not-for-profit society, association or club
• it is established for the purpose of encouragement of either
  • a game or sport
  • animal racing
   
• it meets one of the 3 following tests
  • physical presence in Australia test
  • deductible gift recipient (DGR) test
  • prescribed by law test
   
• it applies its income and assets solely for the purpose for which it is established.

It also must comply with all the substantive requirements in its governing rules. This means that your organisation must operate only in a manner consistent with its rules of core importance to its operation, including those related to its object and purpose and those relating to its not-for-profit (NFP) status.

For more information to help you determine what type of NFP your organisation is and if you're exempt from income tax, see:

• What type of NFP is your organisation?
• Worksheet – Working out your club's income tax status (PDF, 220KB)This link will download a file includes Schedule for multiple purpose clubs.
• Taxation Ruling TR 2022/2 Income tax: the games and sports exemption