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 July 26, 2026

Four Things Every New Association CEO Must Know

The association sector is in the middle of a leadership handover.
Across Australia and New Zealand, CEOs and Executive Directors are moving on. Some are retiring. Some have gone to larger organisations. Some have left because the relationship with their Board ran out of puff. The reasons vary, but the movement is noticeable, and Boards are appointing replacements.
The encouraging part is the calibre of the people coming in. Many are genuinely well suited to the job — capable executives with strong records behind them. A good number are stepping into an association CEO role for the first time.

Read more

Published July 16, 2026

Why Do People Really Join Your Association?

Most associations can provide a long list of membership benefits. They may include professional development, advocacy, networking, industry information, events, resources, accreditation, discounts and access to specialist advice. However, a list of benefits does not necessarily explain why someone makes the decision to join.

Read more

Published July 16, 2026

How to manage the Association Director that takes up all your energy.

While every Board is different, the same governance issues appear time and again. One of the most common is allowing one person’s behaviour to dominate the Board table.

Almost every Board has experienced it at some point. One director who seems to consume more time and energy than everyone else combined.

Read more