As part of the 2021–22 federal Budget, the Australian Government announced reforms to the administration of not-for-profit (NFP) entities that self-assess as income tax exempt.
The measure is designed to enhance trust and confidence in the sector by ensuring only eligible NFPs access income tax exemptions, and that NFP and for-profit entities operate on a level playing field.
From 1 July 2023, NFPs with an active Australian business number (ABN) will be required to lodge an annual self-review return in order to access an income tax exemption.
In subsequent years, NFPs will confirm or amend the information provided to them on a pre-filled self-review return.
If a return is not lodged, they may become ineligible for an income tax exemption and penalties may apply under the ATO’s penalty framework.
Read more here: 2021-22 Budget Paper No. 2 <https://lnkd.in/gsgGp36>