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Not-for-profit organisations' income is treated differently depending on what kind of income it is.

Common not-for-profit income types include:

  • subscriptions
  • grants and subsidies
  • donations or koha
  • fees
  • raffle money
  • trading profits
  • proceeds from selling assets.

Some grants made to not-for-profits can be an unconditional gift or donation, especially if given by charitable trusts.

Income tax on grants and subsidies 

Donations (koha)

Income liable for GST and income tax

The table below shows whether:

  • you'll have to pay income tax on different types of income, if you do not have an exemption from income tax
  • you'll need to charge GST on income, if your not-for-profit is GST-registered.

Income type

Liable for income tax

Not liable for income tax

Liable for GST

Not liable for GST

Exempt from GST





















Unconditional gifts








Suspensory loans




Trading activities




Raffles or housie proceeds




Admission fees




Affiliation fees




Sale of donated goods or services




Sale of purchased goods




Sale of assets or equipment




Insurance receipts




Hall or equipment hire




Rent received (residential)




Rent received (commercial)




Penalty payments (fines)




Advertising or sponsorship




Interest or dividends




Gaming machines





If your income is exempt from GST

If your income is ‘exempt from GST’, it's different from income that's ‘not liable for GST’. This is important when you're working out your claim for GST input tax credits on goods and services for your not-for-profit organisation.

Claiming input tax credits on expenses

If you're a GST-registered not-for-profit you may claim input tax credits on expenses (credits for the GST you've spent on goods and services).

These tax credits can be claimed on expenses gained from income that's either liable or not liable for GST.

You cannot claim expenses gained from income that's exempt from GST, for example renting a residential property (see the table above).

Last updated: 28 Apr 2021
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