In a shift towards clearer compliance measures, not-for-profit entities operating with an active Australian Business Number (ABN) will now be required to lodge a NFP self-review return to maintain access to income tax exemption from the 2023–24 financial year onwards.
Understanding the NFP Self-Review Return
This new return aims to prompt entities to assess their purpose and activities in alignment with specific criteria for eligibility as an income tax-exempt entity. The filing deadline for the 2023–24 income year falls between 1st July and 31st October 2024.
Ease of Submission
The NFP self-review return can be conveniently submitted online via the Online Services for Business platform. Alternatively, if the entity authorizes a registered tax agent, they can lodge it on their behalf using the Online Services for Agents.
Exceptions to the Rule
Certain entities are exempt from the requirement of filing the NFP self-review return. Government entities and charities registered with the Australian Charities and Not-for-profits Commission (ACNC) fall under this exemption category. Charities are already accustomed to lodging an annual information statement to the ACNC, streamlining their reporting obligations.
Moreover, taxable not-for-profits are also exempt from this requirement as they are already in the practice of lodging an income tax return. In cases where filing a return may not be necessary in a specific income year, these entities are expected to notify the Australian Taxation Office (ATO) accordingly.
Staying Compliant and Informed
As these reporting requirements evolve, it's crucial for not-for-profits to stay updated with their obligations. The new NFP self-review return aims to ensure greater clarity and transparency, promoting a smoother compliance process for eligible entities.
It's advisable for affected not-for-profits to familiarize themselves with these changes and take necessary actions to comply with the updated reporting obligations to maintain their income tax exemption status.
The Australian Taxation Office provides detailed guidance and support regarding these requirements on its official platform. Staying informed and proactive can ensure a seamless transition to the new reporting framework and uphold the tax-exempt status for eligible not-for-profit entities.
For further information and detailed guidelines, refer to the ATO's official website or consult with a professional tax advisor specializing in not-for-profit entities.
Source: Changes in reporting requirements for not-for-profits, ATO website, 13 November 2023, accessed 17 November 2023.
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