GST branches, groups and non-profit sub-entities

GST groups for not-for-profits

You may choose to form a GST group if you and all of the potential group’s members meet all of the following conditions:

• You are registered for GST.
• You are not-for-profits (NFPs) and members of the same not-for-profit association.
• You are not members of any other GST group.
• You have no branches for GST purposes.
• You have the same tax periods and account for GST on the same basis.

If you’re not an NFP, refer to GST groups for more information on when you can form a GST group.

For more information on how to notify us of your choice to form a GST group, see GST group – forming, changing or cancelling.

Benefits of forming a GST group

Forming a GST group may be useful for NFPs that:

• are members of the same not-for-profit association
• regularly make supplies and purchases between each other.

If you’re a member of a GST group, transactions between the group members are ignored for GST purposes. This means you:

• don’t pay GST to us on supplies made between members
• don’t have to issue tax invoices for supplies between members
• can’t claim GST credits on purchases between members.

One member of the GST group must be nominated as the representative member. This member must be an Australian resident for tax purposes. Other members don't need to be Australian residents for tax purposes.

The representative member lodges the business activity statement (BAS) to report GST and claim GST credits for all members of the group. This means the representative member is responsible for paying for GST on taxable supplies made by members to entities outside the group and claiming GST credits for all purchases made from entities outside the group.

The GST group is treated as a single entity when working out:

• the amount of GST credits
• whether the representative member has an adjustment, including the amount of the adjustment.

GST religious groups

If you’re a religious organisation endorsed by us as an income tax exempt charity, you may choose to form a GST religious group with another religious organisation if you meet all of the following:

• You are registered for GST.
• All the other members, and proposed members, of the GST religious group are charities registered with the Australian Charities and Not-for-profits Commission (ACNC) and endorsed by us as exempt from income tax.
• You, and all of the other religious group members, are part of the same religious organisation.
• You are not a member of any other GST religious group.

One of the group members must be nominated as the GST religious group’s principal member. This entity must be an Australian resident for tax purposes. Other members don't need to be Australian residents for tax purposes.

A GST religious group must commence from a date that is the beginning of a tax reporting period for all group members.

For more information on how to apply to form a GST religious group, see GST religious group – forming changing or cancelling.

As an ACNC-registered religious institution, you may be eligible for a range of tax concessions for GST, income tax and fringe benefits tax.

Benefits of forming a GST religious group

If you’re a member of a GST religious group, transactions between the GST religious group members are ignored for GST purposes. This means you:

• don’t pay GST to us on supplies made between members
• don’t have to issue tax invoices for supplies between members
• can’t claim GST credits on purchases between members.

This reduces the administrative and cash flow costs associated with intragroup transactions.

Each member of the GST religious group must individually:

• be registered for GST
• pay GST on supplies made outside of the GST religious group
• claim GST credits on purchases made from entities outside the religious group
• lodge a BAS with us.

This is different to a GST group where only the representative member of the group lodges the BAS, pays GST to us and claims GST credits.

Members of a GST religious group are treated as a single entity when working out:

• entitlement to GST credits and the amount of those credits
• whether there are any adjustments and the amount of those adjustments.

Non-profit sub entities

You may choose to treat each branch as a separate entity for GST purposes if you meet all of the following conditions:

• You are an endorsed charity, government school, gift-deductible entity that is an NFP, or you are an income tax exempt NFP that sits in one of the following categories
  • education and science
  • community service
  • employment organisations
  • primary and secondary resources
  • tourism
  • sporting and cultural organisations.
• You are registered for GST and remain registered while you have one or more non-profit sub-entities.
• The branch maintains an independent system of accounting.
• The branch is separately identifiable.
• You record your choice to treat each branch as a separate entity.

If you choose to treat a branch as a separate entity, you’re called the ‘parent entity’, and the separate entity is called a ‘non-profit sub-entity’.

A non-profit sub-entity is a separate entity for GST purposes only. A non-profit sub-entity can:

• have its own Australian business numberExternal Link (ABN)
• register for GST
• apply the same GST concessions as the parent entity.

A non-profit sub-entity is not a separate entity for fringe benefits tax (FBT), income tax or pay as you go (PAYG) purposes.

You can't revoke your choice to create a non-profit sub-entity for 12 months. You also can't make a new choice within 12 months after revoking your previous choice.

Maintaining an independent system of accounting

The records of the non-profit sub-entity must be clearly distinguished from the records of the parent entity. You can maintain clearly identifiable records by using separate cash receipts and cash payment books. You can also show this by having separate bank accounts or books.

Keeping a branch separate from your parent entity

A branch can be separately identified from the parent entity by either the:

• location of the branch
• activities carried on through the branch.

GST registration threshold for non-profit sub entities

The GST registration threshold for a non-profit sub-entity is $150,000 or more. This applies to each non-profit sub-entity created by the parent entity.

The GST registration threshold for a non-profit sub-entity may be different to the parent entity if the parent entity is not an NFP.

If a non-profit sub-entity is registered for GST, it must lodge its own business activity statement separate from the parent entity. For more information see GST registration for NFPs.

Registering non-profit sub-entities for GST concessions

A non-profit sub-entity can be endorsed by us to access GST concessions if the parent entity is also both:

• endorsed by us
• a registered charity with the Australian Charities and Not-for-profits Commission (ACNC).

A non-profit sub-entity can’t be endorsed for other tax concessions as it is only recognised as a separate entity for GST purposes.

For all other endorsements, the non-profit sub-entity is treated as part of the parent entity.

GST branches

You may choose to separately register a branch for GST if it suits your management and accounting structure.

You can register your branch if you meet all of the following:

• The parent entity is registered for GST.
• The branch has an independent system of accounting.
• The branch can be separately identified (either because of its distinctive activities or location).
• You are carrying on (or intend to carry on) an enterprise through the branch.
• The entity is not a member of a GST group.

For more information on how to register and operate a GST branch, see GST branches.