INTHEBLACK February 2025 - Magazine - Page 47
NFP SELF-REVIEW REQUIREMENTS
Non-charitable NFPs in Australia
are now required to submit an annual
self-review return to confirm their
income tax exempt status.
The first lodgement is required to
be made for the 2023–24 income year,
and the return became available for
lodgement from 1 July 2024.
Jennifer Moltisanti, assistant
commissioner at the ATO, explains
that the reporting requirements were
introduced to enhance transparency and
integrity in the tax, super and registry
system by ensuring that only eligible
non-charitable NFPs access the income
tax exemption.
Moltisanti explains that there are
only two pathways through which a
not-for-profit can be income tax exempt.
“The first is that the NFP is a
registered charity with the ACNC.
And then it needs to be endorsed
by the ATO as income tax exempt.
“Pathway two is that a not-for-profit
meets the requirements of one of the
eight categories in the tax law to
self-assess as income tax exempt.
“If an NFP doesn't meet one of these
two pathways, it is a taxable NFP.”
NFPs who self-assess as income tax
exempt through the second pathway
are now required to notify the ATO
of their eligibility for an income tax
exemption each year by completing
the not-for-profit self-review return.
“That's the only thing that's changed,”
says Moltisanti, adding that the
self-review return should take about
10 minutes to complete.
“NFPs don’t need to prepare any
financials for the self-review return,
and it's a great opportunity for all NFPs
to do a bit of a hygiene check.
“Check your governing documents,
check that your activities are aligned
to your purpose, make sure all your
details are up to date and when that
is all done, it's simple to lodge the NFP
self-review return.”
In November 2024, a report was
released by The Senate Economics
Reference Committee to review the
self-assessment requirement for
non-charitable not-for-profit entities.
The report made a number
of recommendations to provide better
certainty and enhance the administration
process for affected entities.
UPSKILL
with CPA Australia's
NFP Audit
Requirements
course
LISTEN
to a podcast
episode about
the NFP CFO
role of the future
EXPLORE
CPA Week
Perth, Australia
12–13 June 2025
intheblack.cpaaustralia.com.au 47
