This guide is for not-for-profit (NFP) member-based organisations such as clubs, societies and associations that are taxable – that is, not exempt from income tax.
We explain which organisations are covered by this guide, and which ones are not.
You should use this guide if you are a financial officer, tax professional or other person involved in the administration of a taxable NFP organisation.
For this guide to apply to your organisation, your organisation must be both:
Examples of the types of organisations covered by this guide include:
- social clubs
- certain business and professional associations
- sporting clubs mainly engaged in providing hospitality services to their members.
- This guide does not apply to all NFP taxable organisations. For a list of organisations that are not covered, see Organisations not covered.
- For more examples, see the table 'Industry codes commonly used by taxable not-for-profit member-based organisations' in Guide to company tax return for not-for-profit organisations.
The basic premise of a NFP organisation is that it is not operating for the profit or gain of its individual members, whether these gains would have been direct or indirect. This applies both while the organisation is operating and when it winds up.
Any profit made by the organisation goes back into the operation of the organisation to carry out its purposes and is not distributed to any of its members.
We accept an organisation as NFP where its constituent or governing documents prevent it from distributing profits or assets for the benefit of particular people – both while it is operating and when it winds up. These documents should contain acceptable clauses showing the organisation's NFP character. The organisation's actions must be consistent with this requirement.
- Not-for-profit companies for examples of clauses that indicate NFP character.
NFP organisations can be either exempt or taxable.
Many NFP organisations are taxable and may need to lodge income tax returns and pay income tax.
If your NFP organisation is not exempt from income tax, it is taxable.
Only certain types of NFP organisations are exempt from income tax. They come from these broad groups:
- community service organisations
- cultural organisations
- educational organisations
- employment organisations
- health organisations
- resource development organisations
- scientific organisations
- sporting organisations.
If you are unsure whether your NFP organisation is taxable or exempt, see Do you need to pay income tax? to help you work out your organisation's income tax status.
This guide does not cover the following types of organisations:
- strata title bodies corporate
- friendly societies
- life assurance companies
- life insurance companies
- mutual insurance companies
- credit unions.