Income tax returns
Exempt non-profit organisations
Not-for-profit organisations that are exempt from income tax do not need to lodge an income tax return unless we specifically ask them to.
If your not-for-profit organisation is taxable (that is, not exempt from income tax), it may have to lodge an income tax return using the company tax return.
For income tax purposes, taxable not-for-profit organisations are treated as either:
- non-profit companies
- other taxable companies.
This distinction is important because non-profit companies have special arrangements for lodging tax returns and special rates of income tax.
A non-profit company that is an Australian resident with a taxable income over the taxable threshold of $416 per year must lodge a company tax return.
Other taxable companies are taxed on every dollar of taxable income. They must lodge an income tax return each year, regardless of their taxable income.
Therefore, to work out whether your organisation needs to lodge a company tax return, you need to do all of the following:
- determine if your organisation is a non-profit company or other taxable company
- know your organisation's taxable threshold for lodgment
- calculate your organisation's taxable income.
While some types of not-for-profit organisations are exempt from income tax, others are taxable and may need to lodge an income tax return.