With the 31 October deadline approaching, we’re continuing our breakdown of the 8 categories to self-assess as income tax exempt. We've already covered the community service, cultural and sporting categories. This time, we’re looking at the remaining 5 categories:
- educational
- health
- employment
- resource development
- scientific.
But first, an important note. If all of your organisation's purposes are charitable purposes for the public benefit and you do not have any independent non-charitable purposes, your organisation cannot self-assess as income tax exempt. You must be registered as a charity with the Australian Charities and Not-for-profits Commission (ACNC) and receive our endorsement to access an income tax exemption.
Ok, let's get started!
Educational organisations
Educational organisations are public institutions whose sole purpose is to provide education. They must be open to the public or a section of the public, and any other purpose must be incidental or ancillary to providing education.
There is considerable overlap between charitable educational organisations and our self-assessment category for public education institutions, as most educational organisations have a charitable purpose of advancing education and aren't eligible to self-assess.
Health organisations
Health organisations include public hospitals or hospitals run by not-for-profit societies or associations. To qualify, they must provide continuous medical care and treatment for sickness, disease or injury, with accommodation as an integral part of that care.
This can include nursing homes for people suffering from illness, hospices for the terminally ill, and day surgeries that offer recovery beds. NFP hospitals include those run by churches and religious orders.
Most hospitals run by not-for-profit societies will be eligible to register with the ACNC under the Advancing Health charitable subtype and aren't eligible to self-assess.
Private health insurers that fall under the Private Health Insurance (Prudential Supervision) Act 2015 and are not carried on for the profit or gain of their individual members may also qualify under this category.
Employment organisations
Employment organisations are typically trade unions, employee associations or employer associations registered or recognised under Australian law. They must be formed to protect and further employment conditions.
To qualify, the organisation must exist, operate, pursue its objectives, and incur its expenditure solely and entirely in Australia.
Resource development organisations
Resource development organisations are not-for-profit societies or associations established to promote the development of specific Australian resources. These can include aviation, tourism, agriculture, aquaculture, fishing, horticulture, industrial, manufacturing, pastoral, viticulture, and information and communications technology resources.
Promoting development can take many forms, such as research, providing facilities, training, improving marketing methods, or facilitating cooperation.
To qualify, the organisation's main purpose must be promoting the development of one or more of these resources. Any other purpose must be incidental or secondary.
Scientific organisations
Scientific organisations may be institutions, societies, associations, clubs, or funds established to advance or encourage science. This includes physical, human, and applied sciences.
They must be not-for-profit and have a main purpose of conducting or enabling scientific research, exploration, teaching or dissemination of knowledge.
There is considerable overlap between charitable scientific organisations and this category. Most scientific organisations are eligible to be registered with the ACNC with the subtype of ‘advancing education’, ‘advancing health’, ‘advancing the natural environment’ or ‘other similar purposes beneficial to the general public’ and aren't eligible to self-assess.
3 other categories eligible to self-assess
The 3 most common NFP categories that qualify for income tax exemption are community service, cultural and sporting, which we covered in our previous edition.
If you're still unsure which category your NFP falls under or whether it meets exemption requirements, check Types of income tax exempt organisations.
Lodging the return
You must check that your not-for-profit meets all the requirements to self-assess under the above categories. Make sure your organisation is not a charity, follows its governing rules and applies income and assets solely for the purpose for which it is established. It must also meet one of the 3 following tests:
- physical presence in Australia
- deductible gift recipient (DGR)
- prescribed by law.
Before you lodge, review the questions in the return using the NFP self-review return question guide to prepare your answers and ensure you have everything ready.
Then find out how to lodge at How to lodge the NFP self-review return.
Stay informed
SubscribingExternal Link to our monthly Not-for-profit newsletter is a great way to get the latest news straight to your inbox, and you can read all the latest articles in our Not-for-profit newsroom.
Or if you want to talk to someone about your NFP or its category, you can phone us on 1300 130 248 between 8 am and 6 pm, Monday to Friday.