NFP/ACNC Registered Charities – How does GST apply?
Not-for-profit (NFP) organisations and charities are entitled to a raft of available GST concessions. We hope that the below summary might help out those of you that are involved in community organisations and charities.
Concessions available to all NFP organisations
- Gifts – if a gift is made voluntarily and the donor does not receive a material benefit in return, the gift is not subject to GST.
- School P&C’s can choose to treat all sales of food as input taxed (no GST). If this applies, the school canteen cannot claim GST on any of its purchases.
- GST registration threshold – NFP GST registration threshold is $150,000. You can voluntarily register for GST below that threshold. Note that gifts/donations do not count towards this threshold, and nor do input taxed sales by school P&C’s as mentioned above.
Additional concessions available to registered charities, certain deductible gift recipients and Government Schools
- Raffles and Bingo – The sale of tickets is GST-free if they do not contravene state or territory law
- Fundraising events – May choose to treat certain fundraising events as input-taxed (no GST).
- Non-Commercial activities
- Accommodation supplies can be GST free when the consideration is less than 75% of the GST inclusive market value of the supply or of the cost to the supplier in providing accommodation
- Non-accommodation supplies can be GST free when the consideration is less than 50% of the GST inclusive market value of the supply or less than 75% of the consideration the supplier provided
- Motor vehicle trade-ins – GST free if less than 50% of the GST inclusive market value of the supply or less than 75% of the of the amount you paid to purchase the vehicle
- Accounting on a cash basis – entitled to use the cash basis of accounting regardless of turnover (except for certain gift deductible entitles operating, a fund authority or institution receiving tax deductible gifts)
- Reimbursement of volunteer expenses – if the volunteer provides a tax invoice for the purchase made the entity can claim back the GST upon reimbursement
- Gifts and GST- not required to repay a GST credit for purchases donated to another endorsed charity or deductible gift recipient
- Donated second-hand goods are generally GST free when unsold if there is no change in the original character of the goods
- GST religious groups – the provision of certain religious services is GST free
- Charitable retirement villages – certain supplies made to residents by a registered charity that operates a retirement village are GST free
If you would like to learn more and see examples, organise a catch up with either James Davis or Michelle Paull of our office.
– James Davis
This article is compiled as a helpful guide for your private information and is subject to copyright. We suggest that you do not act solely on the basis of material contained in this article because items are of general nature only and may be liable to misinterpretation in particular circumstances. We recommend that our advice be sought before acting on any of these crucial areas.