Not For Profit Annual Returns - Has your Bookkeeper or BAS Agent discussed with you the new reporting requirements

I’m concerned that many people aren’t aware of this change in not-for-profits (NFP’s) reporting.  I know I certainly wasn’t when I stumbled on it just after Christmas. The requirement for reporting commenced back on 1st July 2023 (first lodgement due from 1st July 2024).  That made me think about all the NFPs operating around Australia that wouldn’t have any idea that they were required to lodge a return to the ATO before 31st October each year.  Are you one of them? 

From the 2023–24 income year onward, NFPs with an active Australian business number (ABN) will need to lodge an annual NFP self-review return with the Australian Taxation Office (ATO) to access income tax exemptions. The NFP self-review return will guide NFPs to consider their organisation's purpose and activities against the requirements of an eligible income tax exempt entity. This will help them determine the basis on which to self-assess as income tax exempt, and report this to the Australian Taxation Office (ATO). 

To prepare to lodge an annual self-review return, the organisation's principal authority needs to: 

• Check the organisation's contact details are up to date, including ABN registration details. 
• Review the organisation’s main purpose and its governing documents. 
• Set up a myGovID with either a Standard or Strong identity strength. 
• Link myGovID to the NFP's ABN in Relationship Authorization Manager so the NFP can access Online services for business. 

If an NFP doesn't submit their NFP self-review return, they may become ineligible for an income tax exemption and penalties may apply. It’s important to note that Government entities or charities registered with the Australian Charities and Not-for-profits Commission (ACNC) are not required to lodge an NFP self-review return. Charities already lodge an annual information statement to the ACNC each year. Taxable NFPs are also not required to lodge an NFP self-review return as they lodge an income tax return or notify the ATO of a return not necessary each year. 

Source(s) 

1. Changes in reporting requirements for not-for-profits 

2. Not-for-profits – enhancing the transparency of income tax exemptions 

3. Straight from the source – July 2023 | Australian Taxation Office