Private ruling: NFP - eligibility for tax concessions for proposed project
Date of advice: 17 December 2025
Published: 9 February 2026
Ruling period: Year ended 30 June 20XX to year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: If Entity A enters into the proposed project, will they continue to be entitled to be endorsed as an income tax exempt charity under section 50-110 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. Issue 2 - DGR | Q2: If Entity A enters into the proposed project, will they continue to be entitled to be endorsed as a deductible gift recipient (DGR) under section 30-125 of the ITAA 1997? | A2: Yes. Issue 3 - GST | Q3: If Entity A enters into the proposed project, will they continue to be entitled to be endorsed as a charity under section 176-1 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act 1999)? | A3: Yes.

Relevant facts and circumstances: 1. Entity A is a co-operative registered with the Australian Charities and Not-for-profits Commission (ACNC) as a charity as a public benevolent institution. 2. Entity A has an ABN and is registered for GST. 3. Entity A has been endorsed to access the following concessions: • income tax exemption; • GST concession; and • DGR status under item 1 of the table in section 30-15 and item 4.1.1 of the table in section 30-45 of the ITAA 1997. 4. A copy of the Constitution was provided which included appropriate not-for-profit and dissolution clauses. 5. There have been no changes to the constitution since they were implemented. 6. You propose to enter into a community project, where a new entity will be created to manage the project and you will be sole unitholder of the new entity. You provided us with details of the proposed project. Assumptions It is assumed that Entity A will continue to be registered by the ACNC as a charity with the subtype public benevolent institution (PBI).

Relevant legislative provisions: Income Tax Assessment Act 1997 section 30-15 | Income Tax Assessment Act 1997 subsection 30-20(1) | Income Tax Assessment Act 1997 section 30-120 | Income Tax Assessment Act 1997 section 30-125 | Income Tax Assessment Act 1997 Division 50 | Income Tax Assessment Act 1997 section 50-1 | Income Tax Assessment Act 1997 section 50-5 | Income Tax Assessment Act 1997 section 50-47 | Income Tax Assessment Act 1997 section 50-50 | Income Tax Assessment Act 1997 subsection 50-50(1) | Income Tax Assessment Act 1997 subsection 50-50(2) | Income Tax Assessment Act 1997 section 50-52 | Income Tax Assessment Act 1997 section 50-110 | Income Tax Assessment Act 1997 subsection 995-1(1) | Australian Charities and Not-for-profits Commission Act 2012 subsection 25-5(5) | A New Tax System (Goods and Services Tax) Act 1999 section 176-1

Reasons for decision: Detailed Reasoning - Question 1: If Entity A enters into the proposed project, will they continue to be entitled to be endorsed as an income tax exempt charity under section 50-110 of the Income Tax Assessment Act 1997 (ITAA 1997)? | Summary: The proposed project does not impact Entity A from satisfying the requirements to continue to be endorsed as exempt from income tax under section 50-110 of the ITAA 1997. | Detailed Reasoning - Detailed reasoning: Unless otherwise stated, all legislative references are to the Income Tax Assessment Act 1997 . | Detailed Reasoning - Endorsement as an income tax exempt charity: An entity is entitled to be endorsed pursuant to section 50-110 as an income tax exempt charity if it: • has an ABN • is covered by item 1.1 of the table in section 50-5 • satisfies section 50-47, and • satisfies the special conditions in sections 50-50 and 50-52. Section 50-1 states: The total *ordinary income and *statutory income of the entities covered by the following tables is exempt from income tax. In some cases, the exemption is subject to special conditions. (* as defined in subsection 995-1(1)) The tables referred to in section 50-1 are contained in sections 50-5 to 50-45. A registered charity is listed at item 1.1 in the table in section 50-5. The registered charity must meet the special conditions in sections 50-50, 50-52, and 50-47. Entity A has an ABN. Entity A is currently registered as a charity with the Australian Charities and Not-for profits Commission (ACNC) and it is covered by item 1.1 'registered charity' in the table under section 50-5. | Detailed Reasoning - Section 50-47: Section 50-47 provides a special condition for all entities covered by section 50-1, it states: An entity that: (a) is covered by any item; and (b) (b) is an ACNC type of entity; is not exempt from income tax unless the entity is registered under the Australian Charities and Not-for profits Commission Act 2012 (ACNC Act). 'ACNC type of entity' is defined in subsection 995-1(1) as an entity that meets the description of a type of entity in column 1 of the table in subsection 25-5(5) of the ACNC Act. Column 1 of the table in subsection 25-5(5) of the ACNC Act describes a charity. | Detailed Reasoning - Application to your circumstances: Entity A is registered with the ACNC as a charity, therefore is an ACNC type of entity and covered under item 1.1 under 50-5. Section 50-47 applies to Entity A. Entity A satisfies the special condition in section 50-47. A registered charity in section 50-5 must also comply with the special conditions in section 50-50 and 50-52. | Detailed Reasoning - Sections 50-50 and 50-52: Has a physical presence in Australia and, to that extent it pursues its objectives and incurs its expenditure principally in Australia Subsection 50-50(1) will be met if you have a physical presence in Australia, and to the extent incurs your expenditure and purses your objects principally in Australia, or is a Deductible Gift Recipient (DGR) under item 1 in the table in section 30-15. Taxation Ruling TR 2019/6 Income tax: the 'in Australia' requirement for certain deductible gift recipients and income tax exempt entities summarises the explanatory memorandums and explains the Commissioner's view on how the physical presence requirement applies to entities seeking exempt entity status under Division 50. 'The DGR in Australia condition is concerned with the location of the fund, authority or institution as an entity or organisation, rather than the physical presence of particular assets or transactions' (paragraph 6 of TR 2019/6). TR 2019/6 also says that: • 'an entity has a physical presence in a place where it employs assets or people to conduct physical operations' (paragraph 53) • 'where an entity has a physical presence in Australia only, it must incur its expenditure, and pursue its objectives, principally in Australia' (paragraph 56). 'Incur its expenditure' means that 'the required connection will ordinarily exist where the decision to pay is made in Australia, and payment is to occur from an Australian source' (paragraph 62 of TR 2019/6). Entity A carries on its activities in Australia. Entity A is a resident of, has assets in, and is located in Australia. The proposed project will be conducted in Australia. Entity A will continue to apply its income and assets solely for the purpose for which it was established. The purpose outlined in your constitution is the same purpose that is outlined in the Trust Deed of the new entity. Entity A is currently endorsed as an item 1 DGR, in the table under section 30-15, as a charity for charitable purposes under subsection 30-20(1) in Subdivision 30-B. Entity A meets the special condition in subsection 50-50(1) by virtue of being a DGR. Complies with substantive requirements in its governing rules and applies its income and assets for its purpose Subsection 50-50(2) provides that Entity A must: • comply with all the substantive requirements in its governing rules; and • apply its income and assets solely for the purpose for which the entity is established. Paragraphs 18 and 19 of Taxation Ruling 2015/1 Income tax: special conditions for various entities whose ordinary and statutory income is exempt (TR 2015/1) explain that an entity's substantive requirements are those rules that define the rights and duties of the entity, such as those that: • give effect to the object or purpose of the entity • relate to the non-profit status of the entity • set out the powers and duties of directors and officers of the entity • require financial statements to be prepared and retained • set out the criteria for admission as a member of an entity • require an entity to maintain a register of members, and • relate to the winding-up of the entity. Paragraph 33 of TR 2015/1 states that: The income and assets condition requires an entity to apply its income and assets 'solely' for the purpose for which the entity is established. This means that the entity must exclusively or only apply its income and assets for that purpose. Taxation Ruling TR 2011/4 Income tax and fringe benefits tax: charities sets out the Commissioner's view on the meaning of 'charitable' and 'charitable institution'. The following paragraphs state, in relation to benefits for members: 49. An institution set up to advance the interests of its members in their capacity as members cannot be charitable as it cannot satisfy the public benefit requirement. The members of such institutions do not, as members, constitute a section of the public in the relevant sense, and the benefits derived by the members are, as a result, private in nature. 50. However, an institution that benefits its members can still be charitable if: • the member benefits are simply incidental or ancillary to the purpose of benefiting the community; or • the institution is an open and non-discriminatory self-help group that is deemed to have a purpose that is for the public benefit under the Extension of Charitable Purpose Act 2004 . Based on the supporting evidence, and the above analysis, Entity A applies and will comply with the substantive requirements of its governing rules and apply its income and assets solely for the purpose for which it was established. Section 50-52 states that an entity covered by item 1.1 in section 50-5 is not exempt from income tax unless it is endorsed as exempt under Subdivision 50-B (a charity). As Entity A is currently registered as a charity with the ACNC it satisfies section 50-52. | Detailed Reasoning - Application to these circumstances: On the facts provided, Entity A will continue to be endorsed as an income tax exempt entity pursuant to section 50-110 provided it maintains the charity registration with the ACNC, keeps an ABN, and continues to meet the requirements of sections 50-47, 50-50, and 50-52. | Detailed Reasoning - Question 2: If Entity A enters into the proposed project, will they continue to be entitled to be endorsed as a deductible gift recipient (DGR) under section 30-125 of the ITAA 1997? | Summary: The proposed project would not impact on Entity A's entitlement to endorsement unless they cause the ACNC to deregister Entity A as a charity. | Detailed Reasoning - Detail reasoning: Unless otherwise stated, all legislative references are to the Income Tax Assessment Act 1997 . | Detailed Reasoning - Endorsement as a deductible gift recipient: Section 30-125 sets out the requirements that must be satisfied for an entity to be entitled to be endorsed as a DGR. An entity will be entitled to be endorsed das a DGR where it: • meets the description of a DGR item • has an ABN • is 'in Australia' • has acceptable rules for transferring surplus gifts and deductible contributions on winding up or renovation of endorsement. Where an entity meets the above conditions in section 30-125 and is endorsed as a DGR under section 30-120, the entity will continue to be endorsed as a DGR for as long as they meet the conditions in section 30-125. Special condition (a) in item 1 of the table in section 30-15 requires a DGR to be 'in Australia'. Taxation Ruling TR 2019/6 Income tax: the 'in Australia' requirement for certain deductible gift recipients and income tax exempt entities provides further explanation of this special condition. At paragraph 4 the ruling states: The DGR in Australia condition requires a fund, authority or institution to be 'in Australia'. The phrase 'in Australia' is not defined, and so carries its ordinary meaning. | Detailed Reasoning - Application to your circumstances: Entity A satisfies the 'in Australia' condition in section 30-15 as it is established and legally recognised in Australia, and the balance of its decision-making powers, both in operational and strategic matters, lies in Australia. Entity A will satisfy the requirements to be endorsed as a DGR under section 30-125, as it meets the description of a DGR item, the 'in' Australia requirement, has an ABN, and has acceptable rules for transferring surplus gifts and deductible contributions on winding up. As such, as Entity A is endorsed as a DGR, it will continue to be entitled to the endorsement provided it remains registered as a PBI with the ACNC and satisfies the other requirements in section 30-125. The proposed project would not impact on Entity A's entitlement to endorsement unless they cause the ACNC to deregister Entity A as a charity. | Detailed Reasoning - Question 3: If Entity A enters into the proposed project, will they continue to be entitled to be endorsed as a charity under section 176-1 of the GST Act 1999? | Summary: The proposed project does not impact Entity A from satisfying the requirements to be endorsed by the Commissioner as Charity under section 176-1 of the GST Act 1999. | Detailed Reasoning - Detailed reasoning: Unless otherwise stated, all legislative references are to the Income Tax Assessment Act 1997 . An entity is entitled to be endorsed by the Commissioner as a Charity for GST purposes if it satisfies all the requirements under section 176-1. Section 176-1 states: | Detailed Reasoning - Endorsement by Commissioner as charity: (1) The Commissioner must endorse an entity as a charity if: (a) the entity is entitled to be endorsed as a charity (see subsection (2)); and (b) the entity has applied for that endorsement in accordance with Division 426 in Schedule 1 to the Taxation Administration Act 1953. (2) An entity is entitled to be endorsed as a charity if the entity: (a) is an * ACNC - registered charity; and (b) has an * ABN. | Detailed Reasoning - Application to your circumstances: Based on the above, Entity A is currently registered as a charity with the Australian Charities and Not-for profits Commission (ACNC) and has an ABN, satisfying section 176-1 for endorsement as a charity by the Commissioner.