Goods and Services Tax (GST) and GST concessions

What is GST?

Goods and services tax (GST) is a tax of 10% on the sale (supply) of most goods and services consumed in Australia. In general, an organisation that is required by law to ‘register’ for GST purposes:

• is required to pay GST to the Australian Taxation Office (ATO) if it sells something (ie. goods, services); and
• can claim an ‘input tax credit’ from the ATO for the amount of GST included in the price of goods and services it purchases.

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Does our community organisation have to ‘register’ for GST purposes?

Whether your community organisation has to register for GST purposes depends on its annual turnover (income). The ATO has particular requirements for working out an organisation’s ‘annual GST turnover’. For more information on how to calculate your organisation’s annual turnover see the Resources section below.

At the time of writing the GST registration threshold for not-for profit organisations was $150,000.

Our community organisation does not have an annual turnover of $150,000 or more

If your community organisation is a not-for-profit organisation, and it has an annual turnover of less than $150,000, then it does not have to be registered for GST purposes (but can decide to voluntarily register for GST if it wants to). In general, this means it does not include GST in the price of any goods and services it sells, and it is not able to claim GST credits (input tax credits) for the GST in the price of things it buys in carrying on its activities.  Before registering voluntarily you need to decide whether the administrative burden of complying with GST reporting obligations outweighs the benefits. 

Our community organisation has an annual turnover of more than $150,000

If your community organisation is a not-for-profit organisation, and it has an annual turnover of $150,000 or more, then it must register for GST purposes and your organisation will have GST obligations. In general, when it sells something (goods and services) it should pay GST to the ATO and when it purchases goods and services, it can claim an input tax credit from ATO for the amount of GST included in the price of those goods and services.

To register your organisation for GST purposes, you will need to have an Australian Business Number (ABN). Once you have an ABN, you can start the process for registration for GST via the Australian Business Register website, or you can call the ATO. Further details are in the Resources section below.

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If we have to register for GST, do we always have to pay GST or are there some concessions?

Even if your organisation has to register for GST purposes, there are a number of GST concessions that may be available for certain not-for-profit community organisations. These concessions usually relate to particular goods or services (such as sales relating to raffles, bingo, fundraising events, volunteer expenses).

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Which community organisations are eligible for these GST concessions?

If your organisation is registered for GST purposes, there are a number of GST concessions which are available for:

• not-for-profit community organisations that are registered with the ACNC and have been endorsed by the ATO as tax concession charities (TCC). We have included a short fact sheet about applying to be a Tax Concession Charity (TCC) below.
• not-for-profit community organisations that have been endorsed by the ATO as deductible gift recipients (DGRs). See our DGR page for more information.
• certain other entities such as charitable funds, government schools etc.

There are also some limited ‘concessions’ available for not-for-profit community organisations (who are not endorsed as TCCs or DGRs). For example, the laws relating to whether related organisations form a GST group (and therefore don’t have to pay GST on transactions between group members) are more generous for not-for-profit community organisations than they are for ‘for-profit’ businesses.

For full details of the GST concessions, and the organisations that those concessions may be available to, see the ATO resources in the Resources section below.

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Fact sheet: Applying for Tax Concession Charity (TCC) endorsement

The fact sheet below has been written to assist community organisations who wish to apply to the ACNC to become a registered charity, and then the Australian Taxation Office (ATO) for endorsement as a Tax Concession Charity (TCC). It is designed to help your organisation understand whether it is likely to be a charity (as defined in taxation laws) and if so, how to apply for TCC endorsement. We have also included relevant links to ACNC and ATO information in the Resources section below.

If your community organisation is endorsed as a TCC, it will be exempt from paying income tax. It may also get access to a range of other tax concessions (eg. GST and fringe benefits tax).

You can check if you are already a registered charity by searching the Charity register.

You can check your TCC endorsement by searching the ABR register.

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Resources

Australian Charities and Not-for-Profit Commission (ACNC)

Australian Taxation Office (ATO)

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