The Australian Taxation Office (ATO) recently published guidance regarding the treatment of supplies by charities for nominal consideration as GST-free.
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GST and supplies by charities for nominal consideration – benchmark market values
Supplies by endorsed charities are GST-free if they are for provided for nominal consideration.
GST-free activities
If you are an endorsed charity, your supplies are GST-free if you provide them for nominal consideration.
An endorsed charity must be registered with the Australian Charities and Not-for-Profits Commission. It must also be endorsed by us to access these GST charity concessions.
Find out if your organisation is eligible for charity tax concessions.
If you are a residential college, see Supplies for residential colleges.
Consideration and nominal consideration
Consideration means all payments, both monetary and non-monetary for the supply, regardless of who makes the payments.
Nominal consideration is when an endorsed charity makes a supply and the consideration received satisfies the relevant threshold test:
- Accommodation supplies can be GST-free when the consideration for the supply is either:
- less than 75% of the GST-inclusive market value of the supply (see market value guidelines), or
- less than 75% of the cost to the endorsed charity to provide that accommodation – the cost of supply test (see cost of supply guidelines)
- Non-accommodation supplies can be GST-free when the consideration for the supply is either:
- less than 50% of the GST-inclusive market value of the supply (see market value guidelines), or
- less than 75% of the cost to the endorsed charity to provide that accommodation – the cost of supply test (see cost of supply guidelines).
You can compare the consideration received for a supply against the benchmark market values to determine if your organisation's supplies are made for nominal consideration.
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