How to Prepare a NFP Self-Review Return

Starting July 1st, 2024, non-profit organisations (NFPs) in Australia with an ABN, but not recognised as charitable (such as sporting clubs or business groups), must annually submit a NFP self-review return to the ATO to confirm their tax exemption status. This process involves three main sections. Here's a step-by-step on how to manage the process:

1. Organisational Detail:

Provide basic information including the organisation's name, ABN, address, and contact details. You must also estimate the organisation's gross revenue as 'small', 'medium', or 'large'. 2. Eligibility Assessment:

2. Answer questions to establish if your organisation qualifies for tax exemption based on its activities and objectives:

Annual Gross Revenue: Estimate your organisation’s revenue range.
Main Purpose Category: Choose the category that best describes your organisation, such as community service, sport club, cultural, educational, or scientific.
Governing Clauses: Confirm if your organisation has clauses preventing income or asset distribution to members.
Operational Scope: Indicate whether the organisation operates and spends exclusively within Australia.
Charitable Purposes: State if your organisation has any charitable purposes.

3. Summary and Declaration:
Summarise the responses and confirm their accuracy to declare the organisation’s status, whether 'income tax exempt' or 'taxable.' For those exempt, acknowledge the status and submit the return.

Who should prepare the return?

An organisation is the ABN holder. However, the organisation needs a person to log and liaise with the ATO on its behalf. The organisation would need to nominate a person, usually the treasurer or secretary, to be the main person that the ATO would consider as it's point of contact so they know who is lodging / editing and logging on behalf of the organisation.
The main person would need to link their MyGovID to the ABN.
If the main person leaves the organisation, they must unlink their MyGovID from the organisation. Then the organisation must appoint an alternative person to link their MyGovID with the organisation's ABN.

Important Updates and Requirements

Ensure your ABN details are updated within 28 days of any change. Notify the ATO of changes to associates (e.g., board members) using the Change of Registration Details form (NAT 2943) or Online Services for Business. For organisations with known associates, changes can be reported immediately through Online Services for Business or by contacting the ATO Business Enquiry Line on 13 28 66.

Support and Transition

The ATO provides support for organisations adjusting to this new requirement, including

Deadline deferrals
Payment plans for organisations identifying as taxable NFPs for the 2023–24 income year, and;
Potential waivers of interest charges and penalties.

The return is mainly digital, but a telephone option is available for those unable to use online services.

Preparation Steps

Verify ABN Status: Confirm your ABN is active.
Update Information: Notify the ATO of any changes in organisational details or responsible persons.
Gather Documents: Collect governing documents that define your organisation’s main purpose.
Early Self-Review: Conduct a preliminary self-review to confirm eligibility for tax exemption (form available NAT 74141)
Setup Digital Access: Register for myGovID and Relationship Authorisation Manager (RAM) to access Online Services for Business.

Useful links

Reporting requirements to self-assess income tax exemption
Accessing Online Services with myGovID and RAM
Types of Income Tax Exempt Organisations
Change of Registration Details form (NAT 2943)
Income tax status review worksheet for self-assessing non-profit organisations form (NAT 74141)
ATO Reporting Requirements

What you are likely to be asked when completing the return

1. Organisation Details:
Include name, ABN, address, and contact details.

2. Eligibility:

Annual Gross Revenue: Select the appropriate revenue range.
- Small ($0 - $150,000)
- Medium ($150,000 - $3,000,000)
- Large (over $3,000,000)

NOTE: 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.

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

Community Service	Cultural	Sporting Club
Educational	Health (Hospital)	Government
Employment	Health – private health insurer	Resource development
Scientific – research fund	Scientific – other	None of the above

3. Summary & Declaration:
Review and declare your status and submit the return.

NFP Self-Review Return

Need help to prepare your not-for-profit annual return? Reach out to our team for assistance.

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