Being income tax exempt does not automatically make your religious institution exempt from other tax obligations, such as goods and services tax (GST).
Like all not-for-profit (NFP) organisations, your religious institution must register for GST if its GST turnover is $150,000 or more.
If you're not registered for GST, regularly review your current and projected GST turnover. Generally, if your projected GST turnover is $150,000 or more, you must register for GST within 21 days.
Income included in GST turnover
When working out whether you need to register for GST, some types of income must be included in your GST turnover calculation.
Taxable sales
If you’re registered or required to be registered for GST, the sales you make in Australia are generally taxable.
Examples include:
- membership fees, where members receive benefits or services in return for the fee paid
- sales of religious books, study materials and other merchandise
- sales of candles, devotional items and souvenirs
- fees charged for yoga, mindfulness or wellbeing programs
- sponsorship or advertising income
- food and beverage sales from cafés or kiosks
- hall or venue hire
- fundraising events that are not treated as input taxed.
GST-free sales
If your religious institution is registered with the Australian Charities and Not-for-profits Commission (ACNC), sales that are integral to the practice of your religion may be GST-free.
Although GST is not charged on these sales, they must still be included in your GST turnover calculation. Examples include:
- worship services
- Sunday School
- weddings, funerals and baptisms
- religious retreats
- bible study groups.
It is important to note that only services that are integral to the practice of that religion are GST-free. Related commercial activities or ancillary services may not qualify for GST-free treatment.
Income excluded from GST turnover
Some amounts are excluded when calculating whether you have reached the GST registration threshold:
- genuine gifts and donations made voluntarily, where the donor does not receive a material benefit in return, are not subject to GST and are excluded from GST turnover calculations
- certain supplies may be input taxed and excluded from GST turnover calculations, such as an eligible fundraising event that an endorsed charity chooses to treat as input taxed.
Example: calculating GST turnover
A religious institution’s current GST turnover (which is the current month plus the previous 11 months) includes:
• $90,000 in genuine donations
• $50,000 from hall hire
• $110,000 from religious retreats that are GST-free.
The donations are excluded from GST turnover calculations. However, the hall hire income and GST-free religious retreats are included.
The institution's GST turnover is $160,000 ($50,000 + $110,000). Therefore, they must register for GST unless the projected GST turnover (the current month plus the next 11 months) will be below the $150,000 turnover threshold.
End of exampleOther tax concessions
If your religious institution is registered with the ACNC, you may be entitled to access other tax exemptions and concessions.
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