When preparing to submit an NFP self-review return, some NFPs realise they might have charitable purposes and need to register as a charity to be endorsed as income tax exempt.
The NFP will need to assess its eligibility to be registered as a charity. The best way to do this is by using the registration tool on the Australian Charities and Not-for-profits Commission (ACNC) website at Organisations that have been self-assessing as income tax exemptExternal Link.
If your NFP is checking its charitable status with the ACNC and is yet to be registered as a charity, you must still lodge the NFP self-review return to meet your reporting obligation. When you lodge the return:
- Select 'yes' or 'unsure' to the question, 'Does the organisation have any charitable purposes?'
- Submit your NFP self-review return with an 'income tax exempt' outcome. We may contact you to offer support and guidance to establish your charitable status.
You can lodge the NFP self-review return by using Online services for business, through the Self-help phone service on 13 72 26, or through a tax agent.
The NFP self-review return is overdue, so act now. Learn more at What happens if you lodge the NFP self-review return late.
Can a NFP choose not to register as a charity?
By law, NFPs with only charitable purposes that meet the legal definition of a charity must be registered with the ACNC and be endorsed by the ATO to be income tax exempt.
An NFP with only charitable purposes can choose not to register with the ACNC as a charity, however they are not eligible to self-assess their income tax exemption. They are a taxable NFP and may be required to lodge an annual income tax return, or notify us of a non-lodgment advice (NLA). Taxable NFPs must lodge an income tax return or NLA by 15 May each year.
For more information, watch our recorded webinar What if I am charitable – what do I do?External Link It walks through what to do if you find out you are charitable, how to complete the NFP self-review return and charity registration requirements.