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  • Deductible gift recipient reform

    See government reforms to the administration and oversight of organisations with deductible gift recipient (DGR) status.

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    On 5 December 2017, the government announced reforms of the administration and oversight of organisations with deductible gift recipient (DGR) status. The changes were designed to strengthen governance arrangements, reduce administrative complexity and ensure continued trust and confidence in the sector.

    Major elements of the reforms included:

    • requiring non-government organisations wishing to be endorsed as a DGR to be registered as a charity with the Australian Charities and Not-for-profits Commission (ACNC)
    • transferring the administration of the 4 DGR registers to the ATO and ACNC.

    DGRs to be registered as a charity

    On 12 October 2020, Treasury released an exposure draft of legislation to require non-government DGRs to register as charities element for public consultation. Consultation closed on 4 December 2020.

    On 13 September 2021, the Treasury Laws Amendment (2021 Measures No. 2) Act 2021External Link became law.

    This Act amends the Income Tax Assessment Act 1997 to require a fund, authority or institution to, as a precondition for DGR endorsement, be either:

    • a registered charity
    • an Australian Government agency
    • operated by a registered charity or an Australian Government agency.

    Before the amendments, a majority of DGR categories required non-government organisations to be registered as charities. The amendments extended this requirement to 11 general DGR categories. This measure does not apply to ancillary funds or DGRs specifically listed in the tax law.

    For more information, see:

    This page will be updated once there is further information available on the progress of the remaining elements of this reform.

    DGR Register Reform

    Between 19 January and 19 February 2023, Treasury released for public consultation exposure draft legislation and accompanying material for the Deductible Gift Recipient (DGR) Registers Reform measure. This reform is intended to transfer administration of the 4 unique DGR categories from portfolio agencies to the ATO.

    On 22 March 2023, legislative amendments to enable this reform were introduced into Parliament as part of the Treasury Laws Amendment (Refining and Improving our Tax System) Bill. This enabling legislation has not yet been passed by Parliament.

    There are currently 52 categories of DGR set out in the gift provisions (Division 30) of the Income Tax Assessment Act 1997. Of these categories, 4 are currently administered by portfolio agencies. They are:

    • Register of Cultural Organisations administered by the Department of Infrastructure, Transport, Regional Development, Communications and the Arts
    • Register of Environmental Organisations administered by the Department of Climate Change, Energy, the Environment and Water
    • Register of Harm Prevention Charities administered by the Department of Social Services
    • Overseas Aid Gift Deductibility Scheme administered by the Department of Foreign Affairs and Trade.

    If the reform is enacted into law, the ATO would gain responsibility for assessing eligibility for these 4 unique DGR categories, consistent with the 48 other DGR general categories. The ATO would continue to be responsible for the endorsement of all 52 DGR categories.

    This change is intended to make all DGR categories consistent in administration, reduce red tape, and simplify the application process for organisations seeking DGR status.

    You can track the progress of the enabling legislation through parliament at Treasury Laws Amendment (Refining and Improving Our Tax System) Bill 2023External Link.

      Last modified: 21 Apr 2023QC 54421