Commencing for the 2023–24 income year, more than 100,000 non-charitable not-for-profits (NFPs) with an active Australian business number (ABN) are now required to lodge an annual self-review return to notify of their eligibility to self-assess as income tax exempt.
The new reporting requirement was introduced in the 2021–22 Federal Budget to enhance transparency and integrity in the tax, super and registry system by ensuring only eligible non-charitable NFPs access that income tax exemption. The law hasn't changed but the reporting of eligibility has.
The ATO has extended the due date for the 2023–24 income year self-review return until 31 March 2025, to help NFPs lodge their first return. Future self-review returns will be due by 31 October annually.
Charitable NFPs registered with the Australian Charities and Not-for-profits Commission (ACNC) are not required to lodge the self-review return.
ATO Assistant Commissioner Jennifer Moltisanti encouraged NFPs to act now, review their affairs and lodge their first self-review return.
'With the 31 March deadline fast approaching, it is important that all NFPs who are required to lodge the 2023–24 income year self-review return do so in time. NFPs must meet this requirement to continue self-assessing as income tax exempt,' Ms Moltisanti advised.
'Thousands of NFPs have already lodged their first return. It doesn't take much time to complete the return and lodge'.
'We know the NFP population is made up of diverse groups that include community service organisations and sporting clubs right across Australia.'
'It is important all NFPs are aware of their obligations and don't delay lodging their first return. We will support NFPs that are genuinely trying to do the right thing, however, we will review those who intentionally ignore their obligations.'
'If you don't understand the new reporting requirements, we encourage you to act early and ask for help – from the ATO or your registered tax professional,' Ms Moltisanti said.
Some NFPs, when completing their self-assessment, may realise that they instead need to register with the ACNC as a charitable NFP to access the income tax exemption. Others may come to the conclusion that they have incorrectly assumed that they were entitled to a tax exemption.
'If you've mistakenly assessed as income tax exempt in the past it is important you don't worry. You can contact our dedicated team and we can help you work it out.'
'Similarly, if you realise that your organisation should instead be registered with the ACNC as a charitable NFP, you can still lodge the NFP self-review return and we will help you with the next steps,' Ms Moltisanti said.
The ATO has developed the NFP self-review return flowchart to provide a step-by-step guide on how to access and lodge the return online through Online services for business . NFPs can also phone the ATO's self-help phone service on 13 72 26 to lodge by phone or use their registered tax agent.
The return only asks for information that NFPs should already know:
