Back in September 2022 we wrote about 2022 Federal Budget announcement that will require not-for-profit entities that self-assess as eligible for an Income Tax exemption, to lodge an annual self-review return with the ATO from the 2023/24 year.

This regime covers all not-for-profits, other than charities registered with the ACNC, who self-assess as Income Tax exempt under Division 50 of the Income Tax Assessment Act 1997.

This includes community service, cultural (art/literature/music), educational, health, employment, resource development, scientific and sporting organisations.

The annual self-review return for the 2023/24 year can be lodged using ATO online services. A registered tax agent can also lodge the annual self-review return on behalf of a NFP.

The self-review return will:

• include questions like those provided in the current self-review worksheets; and
• guide NFPs to consider their purpose and activities against specific eligibility requirements.

The self-review return will not include any financial questions about the organisation other than their income range.

NFPs will receive a notification that summarises their self-assessed eligibility for income tax exemption once the self-review return is lodged.

Following the first (2023/24) lodgement, NFPs will be able to annually confirm/update information on a pre-populated self-review return.

Failing to complete the annual self-review return could cause a NFP to become ineligible for an income tax exemption and penalties may also be imposed.

The first annual self-review form will become available in July 2024 and must be completed by 31 October 2024.

Whilst the time to submit the annual self-review is some time away, those who are involved in not-for-profits are encouraged to take steps to get up to speed with the latest guidance to ensure that they are correctly self-assessing for the exemption, and to be well positioned to complete the annual self-review.

If you require advice on the tax-exempt status of a not-for-profit that you are involved in, please get in touch.

Sky Accountants Ballarat

Phone: 03 5332 8855

Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia

Postal Address: PO Box 2234, Bakery Hill, Victoria 3354

Sky Accountants Gisborne & Macedon Ranges

Phone: 03 5428 1400

Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia

Postal Address: PO Box 270 Gisborne Victoria 3437