Mutual associations (including clubs and societies)

This draft operational statement explains the income tax treatment of amounts societies, clubs and other not-for-profit associations receive from members, other than amounts subject to a specific tax exemption such as for charities or sports clubs.

It describes how the mutual association provisions override the principle of mutuality meaning that supplies of trading stock and services to members may be taxable.  In addition, following legislative changes proposed in the Taxation (Annual Rates for 2026–27, FBT Simplification, Foreign Investment Funds, and Remedial Measures) Bill, membership subscriptions, fees and levies will generally be exempt income for not-for-profit organisations.  Organisations with net income of less than $10,000, will have no tax liability and may choose not to file tax returns.

The statement applies from 1 April 2027 and will be prospective in application when finalised. 

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