Understanding the New Not-For-Profit Tax Changes

Understanding the New Not-For-Profit Tax Changes

In case you missed it, we recently delivered an insightful webinar explaining the significant tax reform changes for not-for-profit (NFP) organisations.

ATO Assistant Commissioner Jennifer Moltisanti shared her advice and guidance on the topic in great detail. We discussed the key concerns surrounding the changes, providing guidance and answers to some of those tricky questions.

The popular webinar covered many of these areas of focus which have caused some confusion among organisation members. We’ve created a quick round up covering some of the key tips and information to help NFP organisations feel prepared through this transitional time.

Improving Assurance

These are some simple steps that NFPs can take to achieve higher assurance and preparedness for this tax time.

Keeping Good Records

• Keep evidence of how and why the entity treated tax and superannuation matters in a certain manner
  
• Set up an annual review process to demonstrate ongoing eligibility for income tax exemption
  
• Monitor continued eligibility and record the factors for determining entitlement to concessions
  
• Check that calculations are accurate and amounts have been transferred correctly from system records to the BAS
  

Risks Communicated to Market

• Review ancillary fund guidelines to ensure all requirements are met
  
• Record how the taxable value of fringe benefits to employees was calculated and applies to the appropriate concessions claimed
  

Significant Transactions with a Tax or Superannuation Impact

• Payments between related entities are applied for purpose and do not result in private benefit
  
• Prevent errors that will have a large consequential impact on tax and super outcomes by adhering to governance standards 
  

Accounting and Tax Results

• The distribution of funds by an entity meets the special conditions for income tax exemption, for example assets and incomes are applied solely for purpose
  
• Record the determining factors for decisions, for example how uncertain tax positions are accounted for
  

New Reporting Requirements for Non-Charitable NFPs Self Assessing as Income Tax-Exempt 

These are some of the new reporting requirements and how they will work under the new tax reform changes this tax time.

New Annual Self-Review Return

• Non-charitable NFPs with active an active ABN will be required to lodge an annual self-review return to notify the ATO of its eligibility to income tax exemption
  
• The first lodgement is due for the 2023-2024 income year
• If a return is not lodged, penalties may apply from the ATO
  

How Does it Work?

The questions guide NFPs to consider purpose and activities against specific eligibility requirements of an income tax-exempt entity. This will assist NFPs to determine the basis for which to self-assess as income tax-exempt and report this to the ATO. The self-review guide is available on ato.gov.au 

Other Important Key Takeaways

• Non-charitable NFPs with an active ABN will need to lodge their annual NFP return to self-assess as income tax-exempt from the 2023–2024 income year. The annual return can be lodged between 1st July and 31st October through Online services for authorised agents

• Certain entities, including government bodies and registered charities, are exempt from lodging an annual NFP self-review return. Taxable NFPs also don't need to lodge it as they already file an income tax return
  

Need Help?

Get in touch today to see how we can provide the guidance and knowledge to help your NFP organisation through these changes with confidence and efficiency.

Other Articles

Published June 23, 2025

Need new members? Read this first

Too often, associations are eager to expand their membership before ensuring the organisation is on solid footing. But real, sustainable growth starts from within. Before you open the doors to new members, it's essential to check that the ship is seaworthy—strategically, financially, and operationally.

Read more

Published June 23, 2025

Rethinking Your Association's Website: Read This First

While design matters, this narrow focus misses the bigger picture: your website is not just a communications tool—it's a core operational platform.

Read more

Published June 23, 2025

Growing Your Association: A Fresh Look at Income & Expenses

Is your association growing—or just getting by?

Read more