Thousands of not-for-profit organisations (NFPs) fear their financial futures are under threat from a tax change set to kick in next financial year.
From July 1, such organisations must notify the tax office of their tax exemption status for the first time, or start paying income tax.
But as the deadline looms, there are concerns many NFPs don’t have the time or expertise to adapt.
“There are 160,000 not-for-profit organisations and every single one of them has a lot of people that depend on them.
“Then suddenly we find those organisations may no longer be compliant with income tax exempt requirements.”
NFPs are not automatically exempt from paying income tax.
However, they can be granted a tax exemption if they either register as a charity with the Australian Charities and Not-for-profits Commission (ACNC), or comply with certain conditions.
In the past, NFPs have had to self-assess their entitlement, but there hasn’t been a requirement to report it to the tax office.
That’s about to change.
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