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There have been changes to the administration of not-for-profit organisations (NFPs) that self-assess as income tax exempt.

Non-charitable not-for-profits with an active Australian Business Number (ABN) must lodge an annual NFP self-review return to the Australian Taxation Office (ATO) to self-assess eligibility for income tax exemption. The first annual NFP self-review return covers the 2023-24 income year.

Organisations that meet the definition of charity cannot self-assess as income tax exempt.

If you are currently self-assessing as income tax exempt and are unsure if your organisation meets the definition of charity, you can still lodge your NFP self-review return. When you are asked 'Does the organisation have any charitable purposes?' in the return, you can answer ‘yes’ or ‘unsure’.

Charitable not-for-profits

To be income tax exempt, charitable not-for-profits with an ABN must register as a charity with the ACNC, and be formally endorsed as exempt by the ATO.

Some organisations may not consider themselves charitable or refer to themselves as a ‘charity’, even though they meet the definition of charity.

If charitable, an organisation cannot self-assess as income tax exempt, even if it may appear to fit into one of the ATO’s categories of organisations that can self-assess.

This guidance will help you understand if your organisation is eligible to register as a charity. There is also more detailed information about the types of organisations that are commonly registered charities, as well as the factors that may make organisations ineligible to register, under each of the ATO category headings.

If your organisation is eligible to register, the information and resources at the bottom of this page will help you with the registration process.

Charitable not-for-profits that choose not to register as a charity with the ACNC will be taxable, as they are not eligible to self-assess as income tax exempt. Taxable not-for-profits may need to lodge an annual income tax return (or notify the ATO if a return is not necessary).

Eligibility for charity registration

To be eligible for charity registration, an organisation must:

Your organisation must also have an ABN with the right ‘entity type’ (see our guidance about legal structures for more information).

Charitable purposes

The definition of 'charitable' covers 12 charitable purposes, which are set out in the Charities Act:

  • advancing health
  • advancing education
  • advancing social or public welfare
  • advancing religion
  • advancing culture
  • promoting reconciliation, mutual respect and tolerance between groups of individuals that are in Australia
  • promoting or protecting human rights
  • advancing the security or safety of Australia or the Australian public
  • preventing or relieving the suffering of animals
  • advancing the natural environment
  • other similar purposes beneficial to the general public, and
  • promoting or opposing a change to any matter established by law, policy or practice in the Commonwealth, a state, a territory or another country (where that change furthers or opposes one or more of the purposes above).

If you are unsure if your organisation’s purposes align with one or more of these charitable purposes, you should examine its governing document (constitution or rules), as well as its activities, history, and how it uses its funds.

If you apply for charity registration, you’ll need to submit your organisation's governing document, which should include its purposes. Our examples of charitable purposes clauses can be used as a guide.

ATO organisation types and charity registration

The ATO recognises 8 categories of not-for-profit organisations that can self-assess eligibility for income tax exemption.

An organisation that may initially appear to fit into one of these categories may have a recognised charitable purpose. If so, that organisation could meet the definition of charity, and would not be eligible to self-assess as income tax exempt.

Only non-charitable not-for-profits can self-assess as income tax exempt.

Charitable not-for-profits are not eligible to self-assess under these categories. Charitable not-for-profits must be registered with the ACNC and endorsed by the ATO to be income tax exempt.

In the sections below, we have provided information about each of the ATO’s self-assessment categories. This covers the types of organisations that are commonly registered charities, as well as factors that may make organisations ineligible for charity registration.

Community service organisations that meet the legal meaning of charity and our requirements for registration may be eligible to register as charities with the ACNC.

Some types of community service organisations may have a charitable purpose, while others are generally not considered charitable.

Community service organisations that are commonly registered as charities include:

  • playgroup associations (often with the subtype of ‘advancing education’ or ‘advancing social or public welfare’)
  • senior citizens organisations (often with the subtype of ‘advancing social or public welfare’)
  • childcare centres (often with the subtype of ‘advancing education’ or ‘advancing social or public welfare’)
  • community sheds (often with the subtype ‘advancing health’ or ‘advancing social or public welfare’)
  • community halls (often with the subtype ‘other similar purposes beneficial to the general public’)
  • local or community radio stations (often with the subtype ‘advancing education’ or ‘other similar purposes beneficial to the general public’)
  • agricultural societies (often with the subtype ‘other similar purposes beneficial to the general public’).

A community service organisation may not be eligible for charity registration if:

For this reason, traditional services clubs and social clubs are generally not charitable.

This does not mean that charitable organisations cannot provide social or recreational activities. Community service organisations are commonly registered with the ACNC if their social or recreational activities are a means of supporting a charitable purpose, including:

  • relieving poverty, distress or disadvantage of individuals or families
  • caring for, supporting and protecting children and young individuals
  • caring for the aged
  • addressing social isolation or mental ill health.

For example, an organisation that provides social interaction for people living with dementia to improve quality of life and community participation may be eligible to be registered as a charity. These types of community service organisations are commonly registered with the subtype of ‘advancing social or public welfare’ or ‘advancing health’.

Cultural organisations that meet the legal meaning of charity and our requirements for registration may be eligible to register as charities with the ACNC.

Cultural organisations are commonly registered with the subtype of ‘advancing culture’.

The charitable purpose of advancing culture is broader than the ‘arts’ and includes, for example:

  • promoting Australian Indigenous culture, languages and customs
  • promoting and fostering the arts, including literature, music, performing arts and visual arts
  • caring for, preserving and protecting Australian heritage
  • protecting and preserving national monuments, national heritage sites and buildings
  • promoting the culture and customs of language and ethnic groups.

Examples of cultural organisations that are commonly registered as charities include:

  • public museums and galleries
  • botanical and zoological gardens
  • historical societies
  • railway societies
  • organisations that promote historical traditions, such as carnivals and country or folk dancing
  • foundations or trusts that support cultural purposes.

There is a significant degree of overlap between charitable cultural organisations and the ATO’s self-assessment category for societies, associations or clubs established for the encouragement of art, literature or music.

A cultural organisation may not be eligible for charity registration if:

  • the organisation has a purpose that does not benefit the public. For example, it has a purpose of providing benefits to members or individuals, or the cultural facility it operates is not open or accessible to a sufficient section of the public (though an open system of membership or subscription may be acceptable)
  • the organisation has an independent, non-charitable purpose of promoting social interaction or recreation.

The ACNC recognises that individual artists often benefit from the activities of cultural organisations. For example, some cultural organisations award prizes, residencies, grants or scholarships or partner directly with individual artists or arts organisations.

To meet the definition of charity, any private benefits must be incidental or ancillary to the achievement of a charitable purpose. Private benefits will be incidental or ancillary if they are a necessary consequence, or an unsought by-product, of achieving a charitable purpose for the public benefit.

Private benefits are more likely to be considered incidental or ancillary to a charitable purpose where the cultural organisation can demonstrate that the purpose of the activity is, for example:

  • to promote the arts or a cultural form to the broader public
  • to enable the creation or presentation of art or culture for a public audience
  • to improve the accessibility of the arts to a diverse range of people or practitioners
  • to support the vibrancy and sustainability of artistic and cultural organisations and communities.

Not all funds provided to individual artists, cultural practitioners or arts organisations will be considered to further a charitable purpose. Private benefits are less likely to be considered incidental or ancillary where:

  • the cultural organisation cannot demonstrate how recipients or partners are identified or selected (for example, to manage any conflicts of interest)
  • the organisation cannot show how providing funds or benefits to individuals or other organisations will promote culture
  • there are no arrangements in place to ensure that recipients use the funds or benefits only for the purpose for which they were provided.

Educational organisations that meet the legal meaning of charity and our requirements for registration may be eligible to register as charities with the ACNC. Government entities, such as government schools, are not eligible to register.

Educational organisations are commonly registered with the subtype of ‘advancing education’.

Educational organisations that have a purpose of advancing education include those that:

  • provide formal education (for example, non-government schools, pre-schools and universities)
  • provide vocational training
  • are Parents & Citizens Associations for non-government and Parents & Citizens Associations for government schools in some states and territories
  • conduct research directed to expanding human knowledge
  • provide student accommodation at educational bodies
  • operate public libraries or observatories
  • are student unions and associations connected with an educational body
  • provide educational prizes and scholarships.

Advancing education may include less formal education aimed at developing core life skills.

There is a significant degree of overlap between charitable educational organisations and the ATO’s self-assessment category for public education institutions.

An educational organisation may not be eligible for charity registration if:

  • the educational facility is not open or accessible to the public
  • the organisation has a purpose of distributing propaganda
  • the educational activities are entirely unstructured and are not capable of increasing learning, understanding or capabilities
  • the organisation has an independent purpose of promoting sport or recreation and is not attached to an educational institution.

Another common reason that educational organisations are not charitable is that they are government entities (this includes government schools and Parents & Citizens organisations in some states and territories). See our guidance about government entities for more information.

Examples of employment organisations include:

  • trade unions
  • employee or employer associations registered or recognised under the Fair Work (Registered Organisations) Act 2009 or an Australian law relating to the settlement of industrial disputes.

Trade unions and employer associations cannot be registered charities. This is because they do not have charitable purposes for the public benefit, as benefits they provide are for members rather than the general public.

Hospitals (and other healthcare providers) that meet the legal meaning of charity and our requirements for registration can apply for charity registration with the ACNC.

Health organisations that are commonly registered with the subtype of ‘advancing health’ include:

  • organisations established to raise money to purchase medical equipment for hospitals and other healthcare providers
  • mental health organisations
  • disability organisations
  • organisations established to provide education and training to health and medical professionals
  • nursing homes and hospices
  • organisations that undertake health or medical research.

A health organisation may not be eligible for charity registration if:

Certain types of health organisations are not considered to be charities. These include:

Not-for-profit resource development organisations that have a purpose of advancing industry and commerce or innovation – and that meet the legal meaning of charity and our requirements for registration – can be registered as charities with the ACNC.

Some resource development organisations, such as agricultural and horticultural societies, are commonly registered with the subtype of ‘other similar purposes beneficial to the general public’.

A resource development organisation will not be eligible for registration if it has a purpose that does not benefit the public. For example, if it has a purpose of providing benefits to members.

To meet the definition of charity, any private benefits must be incidental or ancillary to the achievement of a charitable purpose. Private benefits will be incidental or ancillary if they are a necessary consequence, or an unsought by-product, of achieving a charitable purpose for the public benefit.

For example, if a resource development organisation primarily operates to promote the business interests of its members, it is unlikely to meet the public benefit requirement of being a registered charity and so will not be eligible to register.

Scientific organisations that meet the legal meaning of charity and our requirements for registration can be registered as charities with the ACNC.

Scientific organisations are commonly registered with the subtype of ‘advancing education’, ‘advancing health’, ‘advancing the natural environment’ or ‘other similar purposes beneficial to the general public’.

Examples of scientific organisations include institutions, associations or research funds that are established and operated primarily to advance science – for example, through research, exploration and teaching.

A scientific organisation will not be eligible for charity registration if the organisation is established for private rather than public benefit. For example:

  • where all research is kept confidential and is commercialised for the purpose of private benefit or gain, or
  • professional associations where the benefits to members and professionals is not merely incidental or ancillary to a charitable purpose.

Although other sporting and recreation clubs make a valuable contribution to our community, as a matter of law, their purposes are generally not recognised as charitable and so are not eligible to register as a charity.

A not-for-profit organisation that conducts sporting activities solely to support a charitable purpose, such as:

  • relieving poverty, distress or disadvantage of individuals or families
  • caring for, supporting and protecting children and young individuals
  • caring for the aged
  • caring for and supporting individuals with disabilities

may be eligible to be a registered charity if it meets the legal meaning of charity and our requirements for registration.

Organisations with a purpose of relieving disadvantage or providing care for the aged, children or individuals with disabilities are commonly registered with the subtype of ‘advancing social or public welfare’.

For example, an organisation whose purpose is to support people living with disability to participate in sport and improve their quality of life may be eligible to register as a charity.

Sporting clubs that are wholly integrated in a not-for-profit educational body such as a school or university and furthering educational aims should refer to our guidance on educational organisations.

Charity registration

The ACNC website has more information to help organisations work out if they may be eligible to apply for charity registration, including guidance on:

If you believe your not-for-profit is eligible for registration as a charity, follow our instructions to apply online.

Bulk registration

The ACNC has developed a bulk registration process, which will only be available to eligible applicants.

If you are a peak body for a group of similar organisations that may need to register with the ACNC, please contact us by email at registration@acnc.gov.au to discuss the bulk registration process and your eligibility.

If your organisation is a member of a group of similar organisations, please contact your peak body to discuss if bulk registration is an option for you, or how else they can offer you support with the registration process.

Choosing a date of registration for your organisation

When you apply for charity registration with the ACNC, you will be asked the date from which you wish to register. The ACNC can only register an organisation on or after the latest of these dates:

  • the organisation’s establishment date
  • the date on which the organisation’s ABN was made active
  • the date on which it meets the requirements to be registered as a charity
  • 3 December 2012 (the date that the ACNC was established).

If you want to backdate your organisation’s charity registration, you will need to demonstrate that it was eligible for registration from that time.

Organisations that have been self-assessing for income tax exemption up until now may have been operating for many years.

The ATO intends on taking a practical compliance approach, focusing its resources on ensuring organisations are assessing their income tax exemption correctly from 1 July 2023 onwards.

However, the ATO may take compliance action if it identifies deliberate tax evasion or fraudulent behaviour prior to the 2023-24 income year.

Tips for completing a registration application

It is vital any registration application your organisation submits to the ACNC is properly completed. A properly completed registration application is critical to a timely assessment.

Each year, the ACNC receives thousands of applications for charity registration. There are common reasons why we reject some of them as incomplete.

Governing document (constitution or rules)

Your organisation’s governing document must include all required information, such as its:

Organisations applying for charity registration must not submit a draft governing document to the ACNC.

If you do not have a governing document, or you need to update your organisation’s governing document, you can use a template and can adapt it to suit its circumstances. The ACNC has templates available for charitable unincorporated associations and companies limited by guarantee.

If your organisation is an incorporated association, you can use the model rules provided by your regulator (for example, your state Fair Trading or Consumer Affairs).

In your governing document, you need to outline your organisation’s purposes. When you are creating or updating your governing document, you can refer to our example charitable purpose clauses. You can also find example not-for-profit and winding up clauses in our not-for-profit guidance.

Your governing document should reflect your organisation’s legal structure. Please check that the same structure is showing for your ABN on ABN Lookup.

Charity application form

You need to list the correct number of Responsible People (your organisation may call them board or committee members). You can find the required number of Responsible People in your governing document. You will need to provide the details of each Responsible Person.

Choose the charity subtype that matches the objects in your governing document. You can choose more than one subtype if that matches your organisation’s objects and activities. We have included common subtypes for each of the ATO’s income tax exempt categories in the above guidance.

You will also need to provide details of how your organisation manages conflicts of interest, and how its Responsible People responsibly manage the organisation’s finances.

Be consistent in how you answer questions on the registration form. For example, answers to questions in the section on tax and deductible gift recipient status (DGR) must be consistent with responses across the rest of the form (for example, whether your organisation operates overseas).

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