A not-for-profit (NFP) organisation may close for various reasons. Regardless of the circumstances, the Australian Taxation Office (ATO) advises that NFPs ensure all their tax and reporting obligations are finalised before ceasing operations. Doing so will help the process run smoothly and prevent unexpected issues later.

Before winding up, NFPs should review and complete all lodgment, reporting, and payment obligations, which may include:

      Cancelling the NFP’s ABN and other tax registrations.
Cancelling the ABN will also cancel access to GST and FBT concessions, income tax exemption, and deductible gift recipient (DGR) status. Before doing so, ensure all activity statements have been lodged, even if there is ‘nil’ to report.

      Considering capital gains tax (CGT) implications.
If the NFP has disposed of property or assets and is not income tax-exempt, it will be treated as a company for income tax purposes and may need to pay CGT.

      Transferring remaining DGR funds.
If the NFP is an endorsed DGR, any remaining gifts, deductible contributions, or related funds must be transferred to another eligible gift-deductible fund, authority, or institution before the organization is wound up.

      Lodging any outstanding returns.
This may include a self-review return (for self-assessed income tax-exempt NFPs) or an income tax return (for taxable NFPs).

      Finalizing employee obligations.
Ensure that employees receive their final pay and superannuation entitlements before closing the organization.

For further guidance, relevant individuals can refer to “Ending your organization” (QC 46372) on the ATO website.

If the NFP is also a registered charity, it should consult the Australian Charities and Not-for-profits Commission (ACNC) resource “Wind up your charity” to understand the additional steps required.

Please contact us directly if you need any help with this.

(Source: Information extract from The NTAA's October 2025 Tax Advisers' Voice)