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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, Treasury has 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 17 March 2021, the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021External Link was introduced to parliament. Schedule 1 of the accompanying explanatory memorandum provides further information on the measure.

    The Bill 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.

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

    Transitional provisions also apply to this measure. Non-government DGRs that are currently not registered as charities are 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.

    See also:

      Last modified: 24 Mar 2021QC 54421