Non-profit? It's Not What You Think it Means

Jason Mitchell

Research output: Contribution to journalArticle


One criteria for exclusion from the Income Tax Assessment Act 1997 (Cth) (ITAA) and for election for exclusion from the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (GST Act) is whether a "body" satisfies the "non-profit" criteria. What constitutes a "non-profit body" is not well articulated, either legislatively or practically. Outside of tax professionals, it is not well understood that for GST (but not ITAA) purposes "body corporates" and other organisations are prima facie within the ATO's interpretation of "a non-profit body". This confusion occurs for two reasons: (a) there is a distinction between ITAA and GST concepts of a non-profit body; and (b) the ATO's interpretations are convoluted. Ultimately for GST purposes, the non-profit nature is determined by where "the body is not carried on for purposes of profit or gain to the individual members", which in turn is linked to "surrounding circumstances" as to whether various "distributions" have occurred, or are intended. This then leads to more questions, including what constitutes a "distribution" of profit or assets, and what common property income of body corporates qualifies as a distribution. This ambiguity has economic consequences, as once within the non-profit ambit, a body need only register for the GST system when its GST turnover exceeds a higher threshold.

Original languageEnglish
Pages (from-to)32-53
Number of pages22
JournalAustralian Business Law Review
Issue number1
Publication statusPublished - Feb 2018

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