Factsheet: Charity tax concessions available

There are a number of tax concessions available to charities from the Australian Taxation Office (ATO) and from relevant state and territory governments. Your organisation must be registered with the ACNC to apply for charity tax concessions from the ATO. It does not need to be registered with us to access state and territory or local government tax concessions.

The ACNC registers organisations as charities for Commonwealth purposes while the ATO remains responsible for administering tax law, including deciding your organisation's eligibility for tax concessions.

Applying for tax concessions from the ATO

Your charity must be registered with the ACNC before it can receive charity tax concessions from the Australian Taxation Office (ATO). Many charities may also be eligible to apply for deductible gift recipient (DGR) status. Some DGR categories require charities to be registered with us first before they can be endorsed as DGRs by the ATO.

You can apply for charity tax benefits including DGR status with the ATO when applying to register with the ACNC.

After we have decided your charity status, we will send your application for tax benefits including DGR status through to the ATO who will decide whether your organisation is eligible. Some tax concessions (see additional tax concessions below) are only available from the ATO if you register as a particular type of charity with us.

You can also apply for tax benefits including DGR status at another time with the ATO if you do not want to apply when registering with us.

What happens next?

The ATO accepts our decision on charity status and decides which tax concessions you are entitled to, depending on your organisation's registered charity type. The ATO may also have additional requirements (special conditions) that you must meet before you receive tax concessions.

Read more in the ATO's guidance on charity tax concessions for not-for-profits.

Charity tax concessions

All charities that register with the ACNC can apply for these tax concessions.

Income tax exemptions and franking credits

Income tax applies to any taxable income received by organisations. All charities registered with the ACNC may apply for income tax exemption (which means your charity would not have to pay income tax). If your organisation is an income tax exempt fund (ITEF), find out about the ACNC and ancillary funds.

Charities that are recognised (endorsed) by the ATO as exempt from income tax may also be eligible to receive refunds on franking credits. This applies if your charity holds shares in a company that provides franked dividends. The ATO provides further information about how to access refunds on franking credits.

Goods and services tax concessions

Goods and services tax (GST) is a tax on transactions. Where goods and services are sold, the amount received for the sale may be subject to GST. Similarly, where goods and services are purchased, the purchaser may be able to claim a GST credit for the GST included in the amount paid. Charities that are registered with the ACNC may apply to access a number of GST concessions if they are also registered for GST.

Fringe benefits tax rebates

Fringe benefits tax (FBT) is a tax paid on any benefits that an employer provides to their employees outside their salary or their superannuation, such as the use of a work car, phone or any other benefit.

If your organisation is a registered charity (other than a registered charity which is an institution established by a law of the Commonwealth Government, a state or a territory) it may apply for the FBT rebate (capped).

Additional charity tax benefits

You can apply for tax benefits additional to those listed above if your charity is registered as a:

Fringe benefits tax exemptions

Fringe benefits tax (FBT) is a tax paid on benefits that an employer provides to their employees outside their salary or their superannuation, such as the use of a work car, phone or any other benefit. Public benevolent institutions, health promotion charities, not-for-profit hospitals and some charities advancing religion can access FBT exemptions. For example, if your organisation is a registered public benevolent institution or health promotion charity, it may apply for the FBT exemption (capped).

Deductible gift recipient (DGR) status

As well as applying for the tax concessions listed above, charities can apply for deductible gift recipient (DGR) status when registering with the ACNC.

The benefit of being a deductible gift recipient is that donations made to your organisation may be tax deductible. If a donation is tax deductible, donors can deduct the amount of their donation from their taxable income when they lodge their tax return.

Donors can find out more about making tax deductible gifts and contributions on the ATO's website.

Attention - Important information!Some categories of DGR are only available to registered charities.

If the DGR status that your organisation is applying for requires you to be a registered charity, you will need to be registered with the ACNC first.

All DGRs should review whether they are required to register with the ACNC by following the guidance provided by the ATO.

For a short summary, you can also read our factsheet on DGRs, and the particular requirements that must be met, including having a DGR revocation clause in your organisation's governing documents.

Tax concessions from state, territory and local governments

There are a number of tax concessions available to charities from state, territory and local governments. Your organisation does not need to be registered with the ACNC to receive state and territory or local government tax concessions.

Concessions may be available on taxes such as stamp duty (a tax on some financial and property transactions), payroll tax (a tax on wages that exceed a certain threshold paid by employers) and land tax (a tax on land owners).Each state and territory has different requirements for accessing these concessions.

Local governments may also give concessions to charities (for example, on rates).

To find out more about how to access concessions available to your charity, contact your local government or your state or territory revenue office.

Contact the ACNC

Phone: 13 ACNC (13 22 62)
Email: advice@acnc.gov.au
Mail: Advice Services, Australian Charities and Not-for-profits Commission, GPO Box 5108, Melbourne VIC 3001
Fax: 1300 232 569


 

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