Tax Concession Charity (TCC) endorsement: ACNC + ATO income tax, GST and FBT concessions

What 'tax concession charity' endorsement covers

The ‘tax concession charity’ (TCC) endorsement is an umbrella endorsement from the Australian Taxation Office (ATO) that combines income tax exemption, GST concessions, and, where eligible, an FBT rebate or FBT exemption. To be eligible for this endorsement, an organisation must first be registered with the Australian Charities and Not-for-profits Commission (ACNC) under the Australian Charities and Not-for-profits Commission Act 2012. Charities must adhere to ACNC governance standards for charities and meet ACNC reporting obligations.

Income tax exemption, conferred by the TCC endorsement, means the charity does not pay income tax on receipts, including interest, rent, trading surplus, and grants. It is important to note that this exemption does not, on its own, make donations to the charity deductible for donors. The endorsement is sought via the ATO’s ‘Application for endorsement for charity tax concessions’ (form NAT 10651), and is often submitted concurrently with ACNC registration.

The ATO may backdate the endorsement to the date the charity first met the requirements, provided the charity can supply record-keeping evidence to support this.

GST concessions for charities

Endorsed charities may be eligible for GST concessions. Specifically, they can treat sales of donated second-hand goods as GST-free, as outlined in Subdivision 38-G of the A New Tax System (Goods and Services Tax) Act 1999. Non-commercial supplies are also GST-free where the consideration received is less than 50% of the GST-inclusive market value or less than 75% of the cost of supply. ACNC external conduct standards apply to all registered charities.

To simplify GST treatment for fundraising events, endorsed charities can elect to treat these events as input-taxed under Subdivision 40-F. Furthermore, endorsed charities have the option to form either a GST religious group or a charitable GST group. This allows members to ignore transactions between them for GST purposes.

Access to most GST concessions generally requires only two preconditions: holding an Australian Business Number (ABN) and being registered with the ACNC as a charity.

FBT rebate vs FBT exemption

Most Tax Concession Charity (TCC)-endorsed charities that are not Public Benevolent Institutions (PBIs), Health Promotion Charities (HPCs), public hospitals or public ambulance services are eligible for the FBT rebate. This rebate reduces the amount of FBT otherwise payable by 47%, with a cap of $30,000 on the grossed-up taxable value per employee for the 2026 FBT year. Any FBT amount above this cap is payable at the full rate of 47% on the excess grossed-up amount. ACNC reporting obligations

PBIs and HPCs are not eligible for the FBT rebate. Instead, they receive the more generous FBT exemption, which is also capped at $30,000 grossed-up per employee. Public hospitals and public ambulance services also benefit from an FBT exemption, but their exemption is capped at a lower amount of $17,000 grossed-up per employee.

The distinction between the FBT rebate and exemption is important for TCC-endorsed charities to correctly calculate and remit their FBT obligations. Charities must ensure they understand which concession applies based on their specific endorsement type and activities.

Ongoing eligibility and review

To maintain Tax Concession Charity (TCC) endorsement, a charity must consistently satisfy both the Australian Charities and Not-for-profits Commission (ACNC) registration requirements and the Australian Taxation Office (ATO) endorsement tests. Failure to do so may result in the revocation of endorsement. Charities should also adhere to ACNC governance standards for charities to ensure ongoing compliance.

The ATO has the power to revoke TCC endorsement, and this revocation can be backdated to the point the charity ceased to be entitled to the concessions. This can create backdated tax liabilities for the charity. Charities are obligated to inform the ATO of any changes that could affect their entitlement to TCC status, such as winding up or a change of purpose, typically within 21 days.

Maintaining ACNC registration is also crucial. ACNC-registered charities must submit an Annual Information Statement to the ACNC each financial year. Information regarding a charity’s endorsement, including the commencement date of concessions, is publicly accessible via the ABN Lookup register.