How to prepare an NFP self-review return

Who needs to complete the NFP self-review return

If your not-for-profit (NFP) organisation has an active Australian business number (ABN), you must lodge an annual NFP self-review return starting with the 2023–24 income year.

Use the information here to guide discussions with your board or committee, to:

• prepare responses for the NFP self-review return
• determine your eligibility for income tax exemption.

Who doesn't need to complete the NFP self-review return

Don’t complete the return if your NFP is one of the following:

• Certain type of government entity
• ACNC type of entity
• Taxable NFP
• NFP sub-entity for GST purposes
• Excluded entities

Certain type of government entity

Don't complete the return if you are any of the following entities:

• a state or territory body under Division 1AB of Part III of the Income Tax Assessment Act 1936
• a municipal corporation
• a local governing body
• a public authority constituted under an Australian law, which means your organisation  
  • is an agency or instrument of government exercising power or command for the public advantage and has governmental authority for doing so
  • possesses powers that are exceptional compared to ordinary individuals, but not necessarily coercive powers.
• a constitutionally protected fund
• a 100% subsidiary of the Future Fund Board that is incorporated under an Australian law.

If you're one of these government entities, you don't lodge an NFP self-review return because you’re income tax exempt in either:

• section 50-25 of the Income Tax Assessment Act 1997
• Division 1AB of Part III of the Income Tax Assessment Act 1936External Link.

If your government entity isn't included above, go to Step 1: organisation details.

To discuss whether the organisation should cancel its NFP self-review reporting obligations, contact the NFP Advice Service.

For more information, see Who doesn't need to lodge.

ACNC type of entity

Don't complete the return if you are an Australian Charities and Not-for-profits Commission (ACNC) type of entity, which we call a charity. Charities don't generally include social clubs, sporting and recreational organisations or professional trade groups.

A charity is an entity that:

• is not for profit
• has only charitable purposes, which means any of the following  
  • advancing health, education, religion or culture
  • advancing social or public welfare
  • promoting or protecting human rights
  • preventing or relieving the suffering of animals
  • advancing the natural environment
  • promoting reconciliation, respect and tolerance between groups of individuals in Australia
  • advancing the security or safety of Australia or the Australian public
  • other similar purposes that are beneficial to the general public
  • promoting or opposing a change to any matter established by law, policy or practice in the Commonwealth, a state, a territory or another country (where that change furthers or opposes one or more of the purposes above)
• doesn't have a disqualifying purpose of either  
  • engaging in, or promoting activities that are unlawful or contrary to public policy
  • promoting or opposing a political party or a candidate for political office
• is not an individual, a political party or a government entity
• is not a social club.

To check whether the organisation is eligible to be registered as a charity, see Self-Assessed Income Tax Exempt organisationsExternal Link at the ACNC website.

Taxable NFP

If your NFP is taxable, you are not required to lodge the NFP self-review return, as you will have already either:

• lodged an income tax return
• notified us that a return is not necessary.

NFP sub-entity for GST purposes

Do not complete the return if your organisation is an NFP sub-entity for GST purposes.

Some NFP organisations have a parent entity that chooses to have some, or all, of its separately identifiable branches or units treated as separate entities for GST purposes. These are called NFP sub-entities.

Because sub-entities only exist for GST purposes, they do not:

• have any income tax reporting obligations
• need to lodge an NFP self-review return.

To discuss whether your sub-entity should cancel its NFP self-review reporting obligations, contact the NFP Advice Service.

For more information, see GST branches, groups and non-profit sub-entities.

Excluded entities

For a full list of NFP organisations that are not required to lodge an NFP self-review return, see Who doesn't need to lodge.

Completing your return

There are 3 steps to completing your NFP self-review return:

• Step 1: Organisation details
• Step 2: Income tax self-assessment
• Step 3: Summary and declaration

Depending on your organisation's main purpose, you may need to answer questions about:

• Prohibiting the distribution of income or assets to members
• Existing, operating and incurring expenditure in Australia
• Charitable purposes

Step 1: Organisation details

Question 1: What was the estimated annual gross revenue for the organisation?

We use this information so we can give tailored support to NFPs of different sizes.

Select from:

• Small: $0 – $150,000
• Medium: Over $150,000 – $3,000,000
• Large: Over $3,000,000

Annual gross revenue is all the money that passes through the organisation in a financial year. This includes sales, interest, receipts from government, grants, donations and bequests, investment income and receipts from members.

A financial year means from July to June. However, you can provide your estimated annual gross revenue for an approved substituted accounting period – for example, October to September.

Step 2: Income tax self-assessment

Question 2: Choose a category that best reflects the main purpose of the organisation.

To work out the organisation's main purpose, look at its governing documents, activities, use of funds and history. Any other purpose of the organisation must be incidental, ancillary or secondary to the main purpose.

Select from:

• Community service
• Cultural
• Educational
• Employment
• Government and NFP sub-entities
• Health – hospital
• Health – private health insurer
• Resource development
• Scientific – other
• Scientific – research fund
• Sporting
• None of the above

Community service

This is a society, association or club established for community service purposes, except political or lobbying purposes. It promotes, provides or carries out activities, facilities or projects for the benefit or welfare of the community. Organisations that advance the common interests of their members or provide private member benefits cannot be community service organisations.

Go to Question 3 Prohibiting the distribution of income or assets to members.

Otherwise read on for more information about community service organisations. If you don't think your organisation matches the description, see whether another category is suitable.

Community service organisations work for the benefit of the community or members with a particular need by reason of youth, age, infirmity or disablement, poverty or social or economic circumstances.

Community service organisations include:

• Justices of the Peace associations
• playgroup associations
• traditional and community service clubs
• pensioner or senior citizens associations
• industry ombudsman.

Community service organisations don’t include:

• clubs that promote public speaking or debating
• clubs that provide a social forum for retired or semi-retired businesspeople and senior public servants
• clubs that provide a social forum for expatriates of a particular country
• pensioner associations that conduct significant political or lobbying activities
• military service unit organisations and social clubs for newcomers to a particular residential area.

Cultural

This is a society, association or clubs whose main purpose is to encourage art, literature or music, or is established for musical purposes. This can include training, performing, displaying, providing information, studying, judging and critiquing.

Professional associations that advance the common interests of members are not income tax exempt. Neither are organisations whose main purpose is providing social and recreational facilities and activities.

Go to Question 3 Prohibiting the distribution of income or assets to members.

Otherwise read on for more information about the meaning of a cultural purpose. If you don't think your organisation matches the description, see whether another category is suitable.

A cultural organisation’s main purpose must be the encouragement of art, literature, music or for musical purposes. Any other purpose must be incidental or secondary to the main purpose:

• Art includes drama and ballet as well as painting, architecture and sculpture, but not exhibition of stamps by philatelic clubs and associations.
• Literature includes a wide range of written or printed works, including works in different languages, on particular subjects or by particular authors.
• Music includes the performance of vocal or instrumental works, and covers various styles (for example, classical, jazz, popular and liturgical).

Educational

This is a public institution whose main purpose is providing education to the public or a section of the public. Any other purpose of the organisation must be incidental or ancillary to this. Education does not extend to just providing information or lobbying.

Go to Question 3 Prohibiting the distribution of income or assets to members.

Otherwise read on for more information about the meaning of an educational purpose. If you don't think your organisation matches the description, see whether another category is suitable.

Public educational institutions include universities or colleges managed by public bodies, grammar schools, primary and secondary schools run by churches or religious bodies and not-for-profit business colleges.

Organisations that are not public educational institutions include colleges run for the profit of private owners, associations operated for their members’ professional benefits and promotional and lobbying groups.

Employment

This includes an employee or employer association or a trade union.

Go to Question 5 Charitable purposes.

Otherwise read on for more information about the meaning of an employment purpose. If you don't think your organisation matches the description, see whether another category is suitable.

An employment organisation is a trade union or an employee or employer association registered or recognised under the Fair Work (Registered Organisations) Act 2009 or an Australian law relating to the settlement of industrial disputes.

To be income tax exempt, the organisation must meet the following conditions. It must:

• comply with all the substantive requirements in its governing rules
• apply its income and assets solely for the purpose for which it is established
• be located in Australia
• pursue its objectives and incur its expenditure principally in Australia (principally is greater than 50%).

Pursuing objectives in Australia can include things done offshore if they are a means of pursuing those objectives. For example, sending employees to a conference overseas to aid their efficiency for the Australian objectives.

An employment organisation is a trade union or an employee or employer association registered or recognised under the Fair Work (Registered Organisations) Act 2009 or an Australian law relating to the settlement of industrial disputes.

To be income tax exempt, the organisation must meet the following conditions. It must:

• comply with all the substantive requirements in its governing rules
• apply its income and assets solely for the purpose for which it is established
• be located in Australia
• pursue its objectives and incur its expenditure principally in Australia (principally is greater than 50%).

Pursuing objectives in Australia can include things done offshore if they are a means of pursuing those objectives. For example, sending employees to a conference overseas to aid their efficiency for the Australian objectives.

Government and NFP sub-entities

Certain types of government entity, NFP sub-entities (for GST purposes) and other excluded entities are not required to lodge an NFP self-review return. To discuss whether the organisation should cancel its NFP self-review reporting obligations, contact the NFP Advice Service.

If your organisation:

• meets the definition of a government entity, an NFP sub-entity or another excluded entity, don't lodge this NFP self-review return
• isn't defined here, go back to the start of Step 2 and see whether another category is suitable.

These entities are either a:

• state or territory body under Division 1AB of Part III of the Income Tax Assessment Act 1936
• municipal corporation
• local governing body
• public authority constituted under an Australian law, which means your organisation  
  • is an agency or instrument of government exercising power or command for the public advantage and has governmental authority for doing so
  • has powers that are exceptional compared to ordinary individuals, but not necessarily coercive powers
• constitutionally protected fund
• 100% subsidiary of the Future Fund Board that is incorporated under an Australian law.

NFP sub-entities have been chosen by a parent entity to be treated as a separate branch or unit for GST purposes only. For more information, see GST branches, groups and non-profit sub-entities.

For a list of entities that are excluded from lodging an NFP self-review return, see Who doesn't need to lodge.

Health – hospital

A public hospital or hospital operated by a not-for-profit society or association.

Go to Question 3 Prohibiting the distribution of income or assets to members.

Otherwise read on for more information about the meaning of a health – hospital purpose. If you don't think your organisation matches the description, see whether another category is suitable.

A hospital is an institution where patients receive continuous medical care and treatment for sickness, disease or injury. Providing accommodation is integral to a hospital's care and treatment. Clinics that mainly treat ambulatory patients who return to their homes after each visit are not hospitals. However, day surgeries that provide beds for patients to recover after surgery may be hospitals.

For more information, see Health organisations.

Health – private health insurer

This is a private health insurer that doesn’t operate for the profit or gain of its individual members.

Go to Question 3 Prohibiting the distribution of income or assets to members.

Otherwise read on for more information about the meaning of a health – private health insurer purpose. If you don't think your organisation matches the description, see whether another category is suitable.

A private health insurer is an insurer within the meaning of the Private Health Insurance (Prudential Supervision) Act 2015. It also doesn’t operate for the profit or gain of its individual members.

For more information, see Health organisations.

Resource development

This is a society or association that promotes the development of Australian resources, aviation and tourism. If the organisation's main purpose is providing services to members, it is not income tax exempt. This applies even if the services help members use the resources better.

Go to Question 3 Prohibiting the distribution of income or assets to members.

Otherwise read on for more information about the meaning of a resource development purpose. If you don't think your organisation matches the description, see whether another category is suitable.

Aviation, tourism and the various resources have their ordinary meaning.

Australian resources include:

• horticultural
• agricultural
• aquacultural
• fishing
• industrial
• manufacturing
• pastoral
• viticultural
• information and communications technology.

Resource development organisations include a society or association that promotes the development of aviation, tourism and Australian resources by different means, including:

• research
• providing facilities
• training
• improving marketing methods
• facilitating cooperation and similar activities.

Scientific – other

This is an institution or association established and operated to advance encourage science through activities such as:

• research
• exploration
• teaching.

Go to Question 3 Prohibiting the distribution of income or assets to members.

Otherwise read on for more information about the meaning of a scientific – other purpose. If you don't think your organisation matches the description, see whether another category is suitable.

Scientific institutions are established and operated primarily to advance science. Common ways of advancing science include research, exploration and teaching. This often involves disseminating information.

The institution isn't income tax exempt if it:

• operates for the profit of individual owners or members
• is a professional association primarily run for the professional or business interests of members.

Scientific associations are established to encourage science. Recreational or hobby clubs don't qualify. Their main purpose of scientific associations must be to encourage science, not promote the professional or business interests of members.

For more information, see Scientific organisations.

Scientific – research fund

This is a fund established to enable scientific research to be conducted by, or in conjunction with, public universities and public hospitals.

Go to Question 3 Prohibiting the distribution of income or assets to members.

Otherwise read on for more information about the meaning of a scientific – research fund purpose. If you don't think your organisation matches the description, see whether another category is suitable.

A scientific research fund must have sufficient links with public universities or public hospitals. The fund doesn't conduct the scientific research. It is conducted by a university or public hospital, or by other bodies in conjunction with a university or hospital. The fund may enable the research by various means, including providing money or facilities.

To be income tax exempt, the fund must be used for the purposes for which it was established. If it's being used for other purposes, it's not exempt.

The fund must also meet one of the following conditions. It must be either:

• located in Australia and incur its expenditure principally in Australia
• established for the purposes of enabling scientific research to be conducted principally in Australia ('principally' is greater than 50%)
• a DGR.

In working out whether the fund incurs its expenditure principally in Australia, it can disregard any distributions it makes of amounts it received as gifts or government grants.

For more information, see Scientific organisations.

Sporting

This is a society, association or club whose main purpose is encouraging a game, sport or animal racing. The organisation won't be income tax exempt if its main purpose is providing non-sporting facilities and activities that are social or recreational in nature.

Go to Question 3 Prohibiting the distribution of income or assets to members.

Otherwise read on for more information about the meaning of a sporting purpose. If you don't think your organisation matches the description, see whether another category is suitable.

A sporting organisation’s main purpose is the encouragement of a game, sport or animal racing.

Games and sports extend to:

• athletic games or sports (such as football and swimming)
• non-athletic games (such as chess and bridge).

The income tax exemption includes horse racing, trotting, greyhound racing and the racing of other animals.

Encouragement of games or sports extends to less direct means such as:

• research or testing
• developing referees
• providing sporting facilities.

Games and sports don't extend to:

• stamp-collecting
• keeping and showing pets
• making model railways
• maintaining vintage cars
• various social and recreational pursuits.

None of the above

If your answer is None of the above, your organisation doesn't meet the requirements to self-review as income tax exempt.

Go to Step 3: Summary and declaration – Taxable.

Prohibiting the distribution of income or assets to members

Question 3: Does the organisation have and follow clauses in its governing documents that prohibit the distribution of income or assets to members while it is operating and winding up?

Select Yes or No.

If you select No, this message appears: 'The organisation can still self-assess as income tax exempt if it doesn’t have these types of clauses in its governing documents, provided it has not distributed any assets or income to members. However, it has until 30 June 2025 to update its governing documents. Failure to do so will mean that it cannot self-assess as income tax exempt from 1 July 2024.'

Depending on your answer to Question 2 about the main purpose of your organisation:

• Go to Question 4 Existing, operating and incurring expenditure in Australia if your organisation's main purpose is either  
  • Community service
  • Cultural
  • Educational
  • Health – hospital
  • Scientific – other
  • Sporting
• Go to Question 5 Charitable purposes if your organisation's main purpose is either  
  • Employment
  • Health – private health insurer
  • Resource development
  • Scientific – research fund.

A governing document can be called:

• rules or articles of association
• constitution
• rule book
• deed of trust.

Your governing documents should set out:

• your organisation’s purpose
• how it is governed, operates and makes decisions.

Your NFP organisation needs to either:

• have clauses in its governing documents stating that profits and assets won’t be distributed for the benefit of members – both while it is operating and when it winds up.
• act consistently with the intent of these clauses and update its governing documents with these clauses by 30 June 2025 (as failure to do so will mean that it cannot self-assess as income tax exempt from 1 July 2024).

For more information, including example clauses you can apply to your governing documents, see What type of NFP is your organisation?

Existing, operating and incurring expenditure in Australia

Question 4: Does the organisation exist operate and incur its expenditure entirely in Australia?

If you select:

• Yes, go to Question 5 Charitable purposes
• No, go to sub-question 4.1.

Sub-question 4.1: Does the organisation incur expenditure and pursue objectives principally in Australia?

Principally means greater than 50%. If it has disregarded amounts, the organisation may still meet the physical presence in Australia test even if it doesn't pursue its objectives and incur its expenditure principally in Australia.

If you select:

• Yes, go to Question 5 Charitable purposes
• No, go to sub-question 4.2 below.

Sub-question 4.2: Is the organisation a deductible gift recipient (DGR)?

A DGR entity is entitled to receive income tax deductible gifts. All DGRs must be endorsed by the ATO unless they are named specifically in income tax law. There are 2 types of DGR endorsement:

1. One is for entities that are endorsed as DGRs in their own right.
2. The other is for an entity that is endorsed as a DGR only for a fund, authority or institution that it operates.

For more information, see DGR categories.

If you select:

• Yes, go to Question 5 Charitable purposes
• No, go to sub-question 4.3.

Sub-question 4.3: Is the organisation located outside Australia and prescribed by name as income tax exempt in income tax regulations?

If you select:

• Yes, go to Question 5 Charitable purposes
• No, go to Step 3: Summary and declaration – Taxable.

Charitable purposes

Question 5: Does the organisation have any charitable purposes?

Select Yes, No or Unsure.

If you select Yes or Unsure, this message appears: 'The ATO may contact the organisation to provide guidance to help determine its charitable status.'

If you select Yes, No or Unsure, go to Step 3: Summary and declaration – Income tax exempt.

Charitable purposes include:

• advancing health, education, religion or culture
• advancing social or public welfare
• promoting or protecting human rights
• preventing or relieving the suffering of animals
• advancing the natural environment
• promoting reconciliation, respect and tolerance between groups of individuals in Australia
• advancing the security or safety of Australia or the Australian public
• other similar purposes that are beneficial to the general public.

To check whether your organisation is eligible to be registered as a charity, see Who can apply to be registered?External Link on the ACNC website.

Step 3: Summary and declaration

The summary shows the answers you gave to the questions in Steps 1 and 2. Based on your answers, your taxable status will be either:

• Income tax exempt
• Taxable

Income tax exempt

The following statement will appear: 'Based on the information provided, the organisation has self-assessed as income tax exempt for this income year.'

Select:

• the boxes to acknowledge your income tax exempt status and that the organisation isn't claiming any tax offset refunds for the income year
• the box to sign the declaration on behalf of the organisation
• Submit to lodge NFP self-review return.

When lodging through Online services, you'll also have the option to print a copy of the questions and your answers to share with your board, committee or tax agent.

You will receive a lodgment receipt ID and next steps explaining that your organisation:

• has met its NFP self-review return obligations for the 2023–24 income year
• must lodge an NFP annual self-review return in future years unless its circumstances change and it's no longer income tax exempt.

Taxable

The following statement will appear: 'Based on the information provided, the organisation has self-assessed as ineligible for an income tax exemption.'

Select:

• the box to sign the declaration that the lodgment is informational only and the organisation may be required to lodge a tax return.
• Submit to lodge the NFP self-review return.

When lodging through Online services, you have the option to print a copy of the questions and your answers to share with your board, committee or tax agent.

You will receive a lodgment receipt ID and instructions on what to do next. The instructions state that the organisation:

• will most likely need to lodge an income tax return for 2023–24 by 15 May 2025 (the due date may be different for an organisation with an approved substituted accounting period)
• can notify us if it is not required to lodge an income tax return in some circumstances.

For more information, see Taxable NFP organisations.

When lodging through Online services, you can print a copy of the confirmation page. 

How to lodge your return

Online

From 1 July 2024, the easiest way to lodge your NFP organisation self-review return is by using Online services. Make sure your:

• organisation's ABN details are up to dateExternal Link
• Associate (principal authority) has set up a myGovIDExternal Link, so they can link to RAM (Relationship Authorisation Manager)External Link and Online services.

Phone

If you can’t access Online services, you can lodge the return using a self-help phone service. This alternative arrangement is only available for the transitional, 2023–24 income year. This option is not intended for:

• NFPs that already report for GST or PAYG withholding
• tax practitioners who can lodge via Online services for agents.

Make sure your organisation's ABN details are up to dateExternal Link, so we can send a letter confirming you need to lodge with a reference to access the phone service.