Supporting landcare organisations through income tax reporting changes

An extension of Landcare Victoria Inc's Advancing Landcare group capacity-building project, this project was delivered in response to 2021 Commonwealth Government reforms to the administration of not-for-profit organisations, including landcare groups, regarding their endorsement as income tax exempt entities. These reforms require many landcare organisations to take action from the 2023/24 financial year onward to be endorsed as income tax exempt, or if not endorsed, to meet their reporting obligations to the Australian Tax Office (ATO).

With funding from the Department of Energy, Environment and Climate Action (DEECA), Landcare Victoria Inc developed resources and provided direct support to Victorian environmental volunteering organisations to help them respond effectively to the new requirements.

Landcare Victoria Inc staff are not legal experts or tax accountants so our guidance should not be taken as legal or financial advice. All information and recommendations on this page and in resources published by Landcare Victoria is general guidance based on our knowledge of environmental groups, our understanding of the relevant legislation, and information published by the ATO, ACNC and other relevant sources.

Background and relevant legislation

The Income Tax Assessment Act 1997 states that charitable not-for-profits (NFPs) are only exempt from income tax if they are registered charities and endorsed as income tax exempt. The Act also defines the types of NFP organisation that are eligible to self-assess as ‘income tax-exempt’, meaning they can work out for themselves whether or not they are taxable.

In the past, self-assessments undertaken by NFPs to determine their income tax status did not have to be submitted to the Australian Tax Office (ATO), resulting in many NFPs self-assessing as exempt when they may not have been eligible to do so. However, in 2021 the Commonwealth Government announced reforms to the administration of NFPs that self-assess as income tax-exempt, requiring eligible organisations to lodge an annual self-review return to access an exemption from the 2023/24 financial year onward.

Environmental volunteering organisations with an active ABN must determine whether they are considered a charitable NFP, as defined by the Charities Act 2013. If so, they must register as a charity with the Australian Charities & Not-for-profits Commission to be endorsed as income tax exempt, as they are not eligible to self-assess as exempt via the self-review return. Our understanding of Victorian landcare groups and networks indicates that most will be considered charitable NFPs in the eyes of the law.

If you determine your organisation is not eligible to register as a charity, then it will only be eligible to self-assess as income tax exempt if it fits into one of eight categories defined by the Income Tax Assessment Act. Any NFP with an ABN that is not registered as a charity and is not eligible to self-assess as exempt will be considered taxable. Taxable NFPs may be liable to pay tax from the 2023/24 financial year onward on all taxable income (assessable income minus allowable deductions) above the NFP company tax-free threshold (currently $416).

Guidance for Victorian environmental organisations

If you represent an environmental volunteering organisation, you may need to take action to comply with the ATO's new reporting requirements and avoid penalties. Organisations that have not yet taken any action are recommended to undertake an immediate review of your organisation's income tax status. This review will help you to understand how the ATO classifies your organisation, the reporting requirements relevant to your type of organisation, and what options are available for meeting your obligations or accessing an exemption.

Please note, as this project has now concluded, direct support appointments are no longer available from Landcare Victoria to guide you through the process of becoming compliant.

Recommended actions:

REVIEW YOUR ORGANISATION'S INCOME TAX STATUS

In brief, you should:

1. Check if your organisation has an ABN by searching the Australian Business Register (ABR) via ABN Lookup. If your organisation does not have an ABN, no further action needs to be taken at this time.

If your organisation does have an ABN:

Take note of the entity name and entity type
Take note of the ABN activation date
Take note of any ACNC registration and Income Tax Exemption details

2. Check if your organisation is a not-for-profit. If it is incorporated, your organisation will have a governing document that may contain not-for-profit and dissolution clauses which prevent the distribution of profits to members. If your organisation is unincorporated, it may not have adopted a governing document which includes the relevant clauses, but it may still operate like a not-for-profit.

There are several ways a Victorian organisation may be incorporated (for example, if it is a registered company through ASIC, a registered Aboriginal corporation through ORIC, a registered cooperative through CAV, or if it is incorporated through an Act of Parliament - such as Committees of Management incorporated through the Crown Land (Reserves) Act 1978) but the most common way is by being a registered incorporated association through CAV. Search the incorporated associations register.

If your organisation is incorporated:

Take note of the incorporation date
Take note of the association's name
Locate a copy of your organisation's governing document (also known as its rules or Constitution). If the organisation is incorporated through Consumer Affairs Victoria, you can download it through myCAV
Take note of the association's purpose (from the incorporation register or your governing document)
Take note of any not-for-profit and dissolution clauses in your governing document which prevent the distribution of profits to members

If your organisation is not incorporated:

That's okay! You don't need to incorporate to become compliant
Look for a statement of purpose or other documentation which sets out your organisation's objectives/purposes/mission
Look for any policies which may indicate your organisation's not-for-profit status

Landcare Victoria resources

Written resources

Guidance note: Reviewing your organisation's income tax status

Trying to work out whether the ATO's reporting changes apply to you? Not sure if your organisation is exempt from paying income tax? Read this guidance note and conduct a review of your group/network's income tax status. Updated January 2026.

Flowchart: Income tax obligations for environmental organisations

This flowchart supplements the guidance note on Reviewing your organisation's income tax status. Use it to determine how your organisation will be categorised by the ATO and whether an income tax exemption is available. Updated January 2026.

Guidance note: Preparing for charity registration

Learn more about charity registration, including the benefits and the key information you should prepare before you apply. Updated January 2026.

FAQ: Income tax and charity registration

Got questions? This FAQ addresses some common misconceptions and answers questions we've received from landcare organisations. Updated January 2026.

Webinar Recordings

Webinar 1: Understanding income tax reporting changes for environmental not-for-profits (2 May 2024)

This webinar provides an introduction to the ATO's income tax reporting changes and the ACNC joined us to explain the process for registering as a charity.

Webinar 2: Understanding income tax reporting changes for Victorian environmental organisations (15 October 2024)

Our second webinar provides more information on the impact of the reporting changes on environmental groups/networks in Victoria and provides guidance for affected organisations. The presentation slides may be downloaded here.

3. Check if your organisation is considered a charity. An organisation is considered a charity if it meets the definition set out in the Charities Act 2013. Put simply, a charity:

is a not-for-profit entity
is not an individual, political party or government entity
has purposes which are considered ‘charitable purposes’ that are ‘for the public benefit’
does not have ‘disqualifying purposes’

If your organisation is a not-for-profit with purposes along the lines of 'Advancing the natural environment', e.g. protecting and enhancing the environment, maintaining and improving local habitat, etc. then your organisation is probably considered an environmental charity.

4. Determine if your organisation is eligible to access an income tax exemption.

Non-charitable NFPs in eight specific categories may self-assess as income tax exempt and meet their reporting requirements by completing the ATO's self-review return at the end of each financial year.
Charitable NFPs may register as charities to be endorsed as income tax exempt and avoid any ongoing ATO reporting requirements. This is the pathway recommended for all eligible environmental organisations.
NFPs that do not (or cannot) access an exemption via either of these pathways will be considered taxable NFPs. Taxable NFPs must report to the ATO at the end of each financial year by lodging a company tax return (when taxable income is above the NFP tax-free threshold) and submitting a non-lodgement advice (when taxable income is below the NFP tax-free threshold).

For more detail on the above recommendation, please refer to Landcare Victoria's guidance note on Reviewing your organisation's income tax status.

If eligible, register as a charity with the ACNC

If you've determined your organisation has an active ABN, does not have an endorsed income tax exemption and is charitable, we recommend preparing to register as a charity with the Australian Charities & Not-for-profits Commission (ACNC) and requesting 'income tax exemption' in the Tax Concessions section of the application form.

ACNC registration is the only way a charitable NFP can be endorsed as income tax exempt.

To register as a charity with the ACNC:

External resources

Forms

The 'Change your registration details' (NAT 2943) form and 'Application to cancel registration' (NAT 2955) form are available in hard copy for members of Landcare Victoria who need to update or cancel an ABN. Reach out if you need one!

Guides

ACNC - Charity registration application checklist and guide

If your organisation is preparing to register as a charity, there is no better resource than this checklist and guide to help you get ready to apply.

Templates

CAV - Model Rules for an Incorporated Association

This governing document template is compatible with charity registration and Victorian state incorporation requirements. It is designed for incorporated associations, but unincorporated organisations may use it as the basis for their governing document too. More information.

ACNC - Rules for a Charitable Unincorporated Association

This governing document template meets charity registration requirements and is suitable for unincorporated organisations. More information.

Your organisation must be eligible (check here)
Your organisation will need a suitable governing document, if it doesn't have one already (and your existing rules may require updating!)
Your ABN details must be correct and up to date, including the entity name, entity type and authorised contact details
Use the Registration Application Checklist & Guide to prepare everything you'll need before starting the application form
When you're ready, visit the Charity Portal, create an account, verify your account, then log in and begin your application

Important

It is important that your charity registration date and tax concession start date (selected on the ACNC application form) are backdated as far as possible. Your organisation's ABN activation date and its incorporation date (if applicable) will restrict how far back you can request your exemption to apply.

If your ABN activation date is more recent than 1 July 2023, we recommend backdating your organisation's charity status and tax concessions to the date of ABN activation.

If your ABN activation date is on or before 1 July 2023, you must ensure your charity status and concessions apply for the full 2023/24 financial year by backdating to 1 July 2023 or earlier. If you do not backdate far enough, you may still have reporting obligations to the ATO for the period the organisation had an ABN but was not exempt.

For more detail on the above recommendation, please refer to Landcare Victoria's guidance note on Preparing for charity registration.

Frequently asked questions

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Do landcare organisations need to pay income tax?

Sometimes! Landcare groups and networks are typically not-for-profit (NFP) organisations. Some NFPs may be able to access an income tax exemption, while others may be considered taxable. Each organisation should regularly undertake a review of its income tax status - that is, it should assess its particular structure, operations and circumstances to determine whether it may be subject to income tax obligations, and/or whether it can be endorsed as income tax exempt.

The key trigger that determines whether you need to take action now is having an active Australian Business Number (ABN) during the 2023/24 financial year, or at any time since. If your organisation has or had an ABN at any time since 1 July 2023, you must ensure it complies with the relevant income tax reporting obligations. This may involve reporting directly to the Tax Office (and potentially paying tax), or taking action to be endorsed as income tax exempt.

If your organisation has not had an active ABN at any time since 1 July 2023, you don't need to take action right now, but it's important that you are aware of the potential obligations your organisation will be subject to if/when it decides to register an ABN in future.

We've never paid tax or dealt with the ATO before, what has changed?

In 2021 the Commonwealth Government announced reforms to the administration of not-for-profits (NFPs) that self-assess as income tax-exempt (non-charitable NFPs within eight specific categories). Those organisations will be required to lodge an annual self-review return to access an income tax exemption from the 2023/24 financial year onward. While landcare organisations are not typically eligible to self-assess as exempt because they are considered charitable, the new reporting requirements have introduced a verification process for the ATO to ensure all NFPs are compliant with the relevant legislation.

We now know that many of the landcare organisations that effectively 'self-assessed' (decided for themselves) that they were exempt from paying income tax were unintentionally non-compliant with the existing legislation (the Income Tax Assessment Act 1997 and the Charities Act 2013). The good news is that charitable NFPs are eligible for income tax exemption, but only if they register as a charity with the Australian Charities & Not-for-profits Commission (ACNC).

When is a landcare organisation considered a 'charity'?

The definition of a charity is set out in the Charities Act 2013. To put it simply, a charity:

is an organisation (not an individual, a political party or a government entity)
is a not‑for‑profit entity (profits/assets are used to achieve the organisation's purpose(s) and are not distributed to members, while the organisation is operating or when it winds up)
has purposes which are ‘charitable purposes’ that are ‘for the public benefit’ (and may also have incidental or ancillary purposes which further its charitable purposes)
does not have ‘disqualifying purposes’ (such as existing to promote a particular political candidate or party)

There are 12 charitable purposes defined in the Charites Act 2013, including 'Advancing the natural environment'. So, if your organisation exists to protect, enhance, restore or otherwise advance the natural environment, it is likely considered a charity in the eyes of the law.

It is important to note that this is true:

whether your organisation helps the environment directly (such as a landcare group conducting weed removal and revegetation projects), or indirectly (like Landcare Victoria Inc, which achieves its purpose through supporting organisations that conduct on-ground works)
whether your organisation is incorporated or unincorporated, and
whether your organisation operates on public or private land, as projects conducted on private property still provide benefits to the environment in general, contributing to biodiversity and benefitting the wider community.

How do I review my organisation's income tax status? When should I do this?

It is recommended that all landcare organisations conduct a review of their income tax status annually, or after any change to your organisation’s governing document (also known as its rules, constitution, or deed of trust), its purposes (also known as objects or objectives), its not-for-profit status, its Australian Business Number (ABN) registration, or its activities. Undertaking a regular review will help to ensure your organisation is meeting its obligations in regard to income tax.

Key considerations include whether or not your organisation has an ABN or might require one soon, and whether or not your organisation is considered charitable in regard to its purposes and activities. Please refer to our guidance notes for more information.

My organisation has an ABN and I think it qualifies as a charitable NFP, what should I do?

If the organisation is an NFP, its purposes align with one or more charitable purposes (e.g. it exists for reasons such as ‘to protect and enhance the natural environment’ and/or ‘to educate the general public on sustainable land management practices’), it operates for the public benefit (the achievement of its purposes will be of benefit widely, not just to members), and no disqualifiers apply, then it will be considered a charity. If the organisation has an ABN, it must act now.

A charitable NFP is not eligible to self-assess as ‘income tax-exempt’, so simply completing the ATO’s annual self-review return is not the path to tax exemption. However, if you've received a letter from the ATO advising to complete the self-review return, you may do so to show the ATO you are working towards compliance. If you've already determined your organisation's purposes are charitable, be sure to enter this on the self-review return form.

Ultimately, if a charitable NFP wants to be endorsed as income tax exempt, it must register as a charity with the Australian Charities & Not-for-profits Commission (ACNC). If it does not register with the ACNC, it will be considered a taxable NFP and must report annually to the ATO by lodging a tax return or submitting a non-lodgement advice when its taxable income is below the NFP tax-free threshold (currently $416). To check if your organisation is eligible for charity registration, use the ACNC's charity registration self-assessment tool.

If you've determined your organisation is eligible to register with the ACNC, we strongly recommend referring to the ACNC's charity registration application checklist and guide to help you collect all of the information and supporting documentation you will need to start your application.

Please refer to our guidance notes for more information.

Okay, we've registered as a charity and been endorsed as income tax exempt, is there anything else we need to do?

Great work! As long as you maintain your organisation's charity status, you will not need to report directly to the ATO regarding income tax.

However, charities do have some ongoing reporting obligations with the ACNC. We recommend watching this webinar about the Annual Information Statement (AIS) which your organisation will need to complete after the end of each financial year. If your organisation is incorporated and usually reports annually to Consumer Affairs Victoria (CAV), please note that as long as you complete the AIS, you will be exempt from annual reporting to Consumer Affairs (but you still need to let CAV know directly if there are changes to your Secretary, rules, etc.).

The ACNC provides heaps of resources for charities to help you govern your organisation effectively, so be sure to check the Small Charities Library and Guidance and Tools section on the ACNC website for factsheets, templates, checklists and more!

Contact us

For more information on this project, please contact:

Amanda Grace
Project Officer

Email: [email protected]
Phone: 03 9034 1941