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The ATO has warned the 150,000 not-for-profits who currently self-assess as income tax exempt to get ready for their annual self-review return.
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ATO urges NFPs to start preparing for new reporting requirement
05 April 2024
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Non-charitable not-for-profits should start taking steps to ensure they are ready to lodge their annual NFP self-review return ahead of the due date in October, the ATO has said.
From 1 July this year, non-charitable not-for-profits (NFPs) with an active Australian Business Number (ABN) will be required to lodge a new annual NFP self-review return to the ATO to confirm their income tax exemption status.
This applies to around 150,000 NFPs that currently self-assess as income tax exempt.
The new reporting requirement was introduced in the 2021–22 federal budget to enhance transparency and integrity in the tax, super and registry system by ensuring only eligible non-charitable NFPs access that income tax exemption, the ATO said.
ATO assistant commissioner Jennifer Moltisanti said the ATO is supporting these NFPs to help them prepare before the changes come into effect.
“It’s important to us that affected not-for-profits understand the new reporting requirements and are prepared to lodge their first annual return come 1 July,” said Moltisanti.
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“Even though the due date is in October, there are things you should do now to make sure you are ready. We also recommend not waiting until the last moment to report, you can report from as early as 1 July.”
The ATO said NFPs who have an active ABN can get ready now by conducting an early review of their eligibility using the ATO’s guide.
It also said they can prepare by checking that all their details are up to date, including authorised associates, contacts and addresses are current.
The Tax Office said they should also review their purpose and governing documents to understand the type of NFP they are. Setting up their myGovID and linking it to their organisation’s ABN using Relationship Authorisation Manager is another important step.
“When it comes time to lodge, NFPs can use Online services for business which lets organisations manage their reporting at a time that is convenient to them,” the ATO said.
“For NFPs that have engaged a registered tax agent, their agent can also lodge on their behalf through Online services for agents.”
As an interim arrangement for the 2023–24 transitional year, eligible NFPs unable to lodge online can submit their NFP self-review return using an interactive voice response phone service, the Tax Office said.
The first return is for the 2023–24 tax year and NFPs will need to prepare and submit their annual self-review between July and October 2024.
“We encourage affected not-for-profits to reach out to us or their registered tax agent if they need help understanding and meeting their obligations,” said Moltisanti.
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