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  • Deductible gift recipient reform

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

    Major elements of the reforms include:

    • 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)
    • the removal of public fund requirements for DGRs
    • transferring the administration of the four DGR registers to the ATO and the ACNC.

    Requiring deductible gift recipients (DGRs) to be registered as a charity

    On 12 October 2020, The 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, Treasury Laws Amendment (2021 Measures No. 2) Act 2021External Link became law.

    The Treasury Laws Amendment (2021 Measures No. 2) Act 2021External Link amends the Income Tax Assessment Act 1997 to require a fund, authority or institution to, as a precondition for DGR endorsement, be:

    • a registered charity; or
    • an Australian government agency; or
    • 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.

    Transitional arrangements also apply for eligible DGRs, if additional time is required to register as a charity. These are a 12-month general transition period and an additional three-year extended transition period, in limited circumstances. Non-government DGRs that were not registered as charities when the Bill was introduced were encouraged to register with the ACNC in preparation of the passage of legislation.

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

    For more information see: DGRs required to be a registered charity

    See also

      Last modified: 27 Sep 2021QC 54421