Types of tax concessions

All charities that register with the ACNC and some incorporated associations can apply for the following tax concessions.

Income tax exemptions

Income tax applies to any taxable income received by an organisation. Only certain types of not-for-profit organisations are exempt from paying income tax.

Charities and PBIs are generally exempt from income tax, but this is not automatic and an application must be made to the ATO for endorsement as a tax concession charity.

An incorporated association that is not a charity or PBI may still be exempt from income tax under another category. In this case, the association does not need to apply to the ATO, but can conduct its own self assessment to determine whether or not it is eligible for tax exemption. The ATO website also has useful information about self-assessment.

If an association is exempt it will not have to pay income tax nor lodge income tax returns. If the association does not qualify for exemption, then it is taxable and must lodge tax returns each year.