Tax and finance
This section contains legal information on setting up, managing and reporting on your organisation's financial and tax situation. It provides information about tax concessions and exceptions, as well as what financial records need to be kept and who is responsible for them.
*NOTE* The law regulating charities has changed and there is a new charities regulator - the Australian Charities and Not-for-profits Commission (ACNC). The information on this page has NOT yet been updated to reflect the changes. For more information about the changes, go to the PilchConnect page on the ACNC here.
Tax issues
Not-for-profit community organisations are required to comply with both Commonwealth and state tax laws.
In general, your community organisation may need to pay tax on things like the income it receives, and GST on goods and services supplied, or stamp duty on a purchased property.
Some not-for-profit community organisations are entitled to exemptions, concessions or rebates in relation to certain taxes. An 'exemption' is where the organisation does not have to pay the tax at all, a 'concession' is where the organisation pays a reduced rate of tax, and a 'rebate' is where an organisation can claim back some tax paid.
For more information about some of the specific taxes your organisation may have to pay (and the exemptions or concessions that may be available) click on the following pages:
There are other tax benefits that not-for-profit community organisations may be eligible for. For example, organisations that apply for and are endorsed as deductible gift recipients (DGR) are entitled to receive tax deductible gifts and contributions. See:
It is best to get your organisation's tax issues right at the beginning. This is because you may need to include special wording in your organisation's constitution (or rules) to be eligible to apply for tax concessions or endorsements. Also, the way you set up an organisation (ie. defining who are members) may also have an impact on tax liability, as there are laws that allow membership income to be treated as tax exempt in certain circumstances.
You may need to seek specialist legal or accountancy advice on tax issues when establishing your organisation. For general information on setting up a community organisation, go to www.pilch.org.au/gettingstarted.
On 27 July 2024 a new statory definition of "charity" was passed by federal parliament in the Charities Bill 2013 (Cth). This definition will be used by the ACNC to assess whether an organisation is a charity. We expect the ACNC to shortly provide guidance on itnerpreting the new definition of charity. PilchConnect has NOT yet updated its resources to reflect the new definition.
Financial reporting
For information about legal duties of a community organisation in relation to overseeing the finances of the organisation, see:
Resources
Australian Charities and Not-for-Profit Commission (ACNC)
Australian Taxation Office (ATO)
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The ATO is the government agency responsible for (federal) taxes in Australia.
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This section of the ATO's website is dedicated to providing not-for-profit organisations with information about the tax they must pay, as well as the tax concessions that they may be eligible for.
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This ATO guide provides an overview of tax obligations and concessions for not-for-profit organisations, and may help to identify which taxes affect your organisation.
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This guide provides guidance on the steps that should be taken if you disagree with a decision by the ATO which affects your community organisation.