Taxation concessions available for some associations
Tax concessions are available for a range of not-for-profit organisations, including charities, public benevolent institutions and other types of incorporated associations. Concessions include:
- exemption from income tax,
- rebates to reduce fringe benefits tax (FBT), and
- goods and services tax (GST) concessions.
To qualify for these tax concessions, an organisation must be a not-for-profit organisation which does not operate for the financial gain of its members. Incorporated associations are by legal definition not-for-profit organisations, and therefore many will be eligible for one or more tax concessions.
A charity is a fund or institution that pursues charitable purposes that are of public benefit. To be recognised as a charity by the ATO, and therefore eligible for charity tax concessions, an organisation must:
- be not-for-profit;
- exist for the benefit of the public or the relief of poverty;
have a purpose that is a charitable purpose under the law; and
be registered with the Australian Charities and Not-for-Profits Commission (the ACNC).
In terms of Australian taxation law, charitable purposes are those directed towards:
- the relief of poverty where the benefit is provided to persons in a particular class.
- the advancement of education.
- the advancement of religion where the religious purpose is for the benefit of the community.
- advancing social or public welfare.
- other purposes that are beneficial to the community. For example animal protection, health promotion, aged care and preservation of cultural and historical sites.
Sporting, recreational, social, political or promotional purposes are not considered charitable.