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The ATO has addressed emerging concerns about the new reporting for NFPs and provided tips for lodgment as the deadline draws closer.
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14k NFPs lodge first self-review return
14 November 2024
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ATO assistant commissioner Jennifer Moltisanti said while around 14,000 not-for-profits (NFPs) had lodged their inaugural self-review return, many were still concerned or frustrated about the new reporting requirements.
The new reporting obligations require non-charitable NFPs that have an ABN and self-assess as income tax exempt to lodge an annual NFP self-review return to notify the ATO of their eligibility for one of the eight categories outlined in tax law.
Moltisanti said despite the ATO's efforts to communicate the changes and engage with NFPs, some NFPs still felt they've had inadequate time to prepare and were unsure about how to complete the self-review return.
"When I recently spoke about the new requirements at a forum, I heard that many NFPs were surprised, and even annoyed about the new reporting requirements. There were organisations in the audience which had never been entitled to self-assess as income tax exempt, had never considered their tax status, or engaged with the ATO," Moltisanti said.
"In addition to that annoyance, I sensed a general fear of ATO repercussions where organisations were concerned they’d made a mistake."
Moltisanti said the ATO has attempted to address some of the concerns raised by NFPs by streamlining the NFP self-review return so that the ATO is only requesting information that NFPs should already have at hand. This includes organisational details and the purpose of the organisation.
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The ATO has also sought to address feedback by extending the lodgment due date to 31 March 2025, she added.
Moltisanti noted that NFPs do not need to contact the ATO to receive this extra time.
However, NFPs will need to determine if they need to make an adjustment to be ready to lodge, she explained.
"NFPs who need to update their authorised contacts can use the downloadable ‘Change of registration details’ form we’ve made available to make it easier to request an update of contacts," she said.
Moltisanti said NFPs that either have or are unsure if they have charitable purposes will benefit from the ATO's efforts to streamline the NFP self-review return to accept lodgment from potentially charitable NFPs.
"We will work with these organisations and the ACNC post-lodgment to determine their tax status," she said.
NFPs that are ineligible to self-assess as income tax exempt can also still lodge the return, Moltisanti said.
"We’ll work with them to get their status right going forward."
NFPs with a taxable outcome on their NFP self-review return can use the concessional due date of 15 May 2025 provided by the ATO to lodge their income tax return, pay any income tax liability or notify the ATO that they don’t need to pay using non-lodgment advice.
Moltisanti also said that NFP companies that have a taxable income below the $416 threshold will soon be able to use a new non-lodgment advice proforma to make it easier to notify the ATO.
"Our adjustments have been made in good faith to support NFPs in meeting their obligations," she said.
The ATO also urged NFPs not to delay their lodgment and to prepare by visiting the ATO's NFP self-review return question guide.
Moltisanti said NFPs should review their governing documents/constitution to ensure the purpose remains true and consistent with the activities and operations of the NFP organisation.
"This is key to self-reviewing eligibility to the income tax exempt category that is relevant."
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