Charity reporting
If your corporation is registered as a charity with the ACNC, you do not need to submit an annual information statement or annual financial report to the ACNC.
ORIC and ACNC work together so that if your corporation meets its obligations with ORIC then you are also meeting your obligations to ACNC. That is, your corporation need to notify the ACNC of any changes or send them reports – you keep your corporation records updated with ORIC and ORIC passes that information to ACNC for them to update the ACNC register. See corporation obligations to ACNC.
Tax
Being proactive about your corporation’s tax obligations is good governance.
Your corporation’s tax obligations will be different depending on the rules it has for using its profits, the types of activities is does, whether it has employees and any benefits you might offer to employees.
Check your rule book:
- If there are rules preventing your corporation from giving money or property to its members = then you are not-fot-profit.
- If there are no rules to stop you from making distributions to members = you are for-profit.
For-profit corporations
If your corporation is for-profit you need to lodge a company tax return.
A for-profit corporation’s purpose or main goal is to earn income and profit for its owners. They usually sell a product or services with the goal of making a profit. They can keep the money, share it with owners or investors, or reinvest it.
Not-for-profit or non-profit corporations
Many not-for-profit corporations may be eligible for tax concessions and may not have to lodge a tax return.
A not-for-profit corporation’s purpose is to provide a service or benefit to the community to improve or fulfill the needs of their community. Any profits they make cannot be shared with members, they must be kept or reinvested back into services or benefits for the community.
See tax and super information on the Australian Taxation Office (ATO) website.
Income tax exemptions
Tax law says that certain types of organisations don’t have to pay income tax. Read a summary of tax concessions for NFP organisations on the ATO website.
Non-charitable not-for-profit corporations with an active Australian Business Number (ABN) are required to lodge a self-review return to self-assess as eligible for income tax exemption. This annual reporting requirement came into effect on 1 July 2023. The first NFP self-review return that non charitable not-for-profits will lodge covers the 2023-24 reporting period.
- If your corporation is registered as a charity with the Australian Charities and Not-for-profits Commission (ACNC) and has been endorsed by the Australian Taxation Office (ATO) as tax exempt, it does not have to pay income tax or lodge a self-review return. Check the charity register to see if your corporation is currently registered.
- If your corporation is eligible to be a charity but is not registered with the ACNC, you will need to pay tax. To be exempt from paying income tax, your corporation must register with the ACNC and be endorsed by the ATO as tax exempt. You cannot self-assess for income tax exemption.
- If your corporation is not eligible to be a charity but is a not-for-profit, has an active Australian business number (ABN) and meets one of the categories for income tax exemption every year it must complete a self-review return and lodge it with the ATO; your corporation may not have to pay income tax.
Read about the reporting requirements to self-assess income tax exemption on the ATO website.
Got questions about tax? Please seek help from your accountant or the Australian Taxation Office (ATO).