Explanatory Memorandum
(Circulated by authority of the Assistant Treasurer and Minister for Financial Services, the Hon Stephen Jones MP)Chapter 4 Deductible gift recipients - specific listings
Outline of chapter
4.1 Schedule 4 to the Bill amends the ITAA 1997 to:
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- list Justice Reform Initiative Limited and Transparency International Australia as DGRs;
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- extend the DGR listing of the Victorian Pride Centre Ltd and the Australian Sports Foundation Charitable Fund.
Context of amendments
4.2 The income tax law allows income tax deductions for taxpayers who make gifts of $2 or more to DGRs. To be a DGR, an organisation must fall within one of the general categories set out in Division 30 of the ITAA 1997 or be listed by name in that Division.
4.3 DGR status helps eligible organisations attract public financial support for their activities.
4.4 Justice Reform Initiative Limited (ABN 68 640 446 448) is a charity which seeks to divert people affected by disadvantage from the criminal justice system and address the impacts associated with periods of incarceration.
4.5 Transparency International Australia (ABN 23 068 075 525) is a charity that pursues the object of overcoming corruption and its direct or indirect impacts in Australia and across the world.
4.6 The Victorian Pride Centre Ltd (ABN 68 615 432 838) is a charity that supports the LGBTIQ+ community and promotes reconciliation, mutual respect and acceptance between groups of individuals, and the protection of human rights.
4.7 The Australian Sports Foundation Charitable Fund (ABN 97 179 064 897) is a charity that raises funds from the philanthropic community to support charitable causes through sport, focusing on disadvantaged and marginalised groups in Australia.
Summary of new law
4.8 Schedule 4 to the Bill amends the ITAA 1997 to allow the following entities to be listed as DGRs under the income tax law:
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- Justice Reform Initiative Limited; and
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- Transparency International Australia.
4.9 Schedule 4 to the Bill amends the ITAA 1997 to extend the period in which the Victorian Pride Centre Ltd is a DGR under the income tax law.
4.10 Schedule 4 to the Bill amends the ITAA 1997 to extend the period in which the Australian Sports Foundation Charitable Fund is a DGR under the income tax law.
Detailed explanation of new law
4.11 Taxpayers may claim an income tax deduction for gifts made to Justice Reform Initiative Limited (ABN 68 640 446 448) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that Justice Reform Initiative Limited receives public financial support for their activities. [Schedule 4, item 3, table item 13.2.38 in subsection 30-105(2)]
4.12 Taxpayers may claim an income tax deduction for gifts made to Transparency International Australia (ABN 23 068 075 525) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that Transparency International Australia receives public financial support for their activities. [Schedule 4, item 3, table item 13.2.39 in subsection 30-105(2)]
4.13 Taxpayers may claim an income tax deduction for gifts made to the Victorian Pride Centre Ltd (ABN 68 615 432 838) for a longer period than initially provided when it was first listed as a DGR, provided the gift complies with the existing requirements of the income tax law. This amendment ensures that the Victorian Pride Centre Ltd continues to receive public financial support for their activities. [Schedule 4, item 1, table item 4.2.44 in subsection 30-45(2)]
4.14 Taxpayers may claim an income tax deduction for gifts made to the Australian Sports Foundation Charitable Fund (ABN 97 179 064 897) for a longer period than initially provided when it was first listed as a DGR, provided the gift complies with the existing requirements of the income tax law. This amendment ensures that the Australian Sports Foundation Charitable Fund continues to receive public financial support for their activities. [Schedule 4, item 2, table item 10.2.9 in section 30-90]
Consequential amendments
4.15 Schedule 4 to the Bill also amends the index (Subdivision 30-315) for Division 30 of the ITAA 1997 to reflect the amendments. [Schedule 4, items 4 and 5, table items 64AB and 116AB]
Commencement, application, and transitional provisions
Commencement
4.16 The amendments commence on the first day of the quarter following Royal Assent. [Clause 2]
Application
4.17 The amendments apply to gifts made on or after 1 July 2023 and on or before 30 June 2028 to the Justice Reform Initiative Limited. [Schedule 4, item 3, table item 13.2.38 in subsection 30-105(2)]
4.18 The amendments apply to gifts made on or after 1 July 2023 to Transparency International Australia. [Schedule 4, item 3, table item 13.2.39 in section 30-105(2)]
4.19 The amendments apply to gifts made in the period on or after 9 March 2023 and on or before 8 March 2028 to the Victorian Pride Centre Ltd. [Schedule 4, item 1, table item 4.2.44 in subsection 30-45(2)]
4.20 The amendments apply to gifts made on or after 1 July 2023 onwards to the Australian Sports Foundation Charitable Fund. [Schedule 4, item 2, table item 10.2.9 in section 30-90]
4.21 The amendments apply retrospectively. This ensures that if gifts were made prior to the commencement of Schedule 4 to the Bill, they may be tax deductible for income tax purposes, provided they comply with other requirements of the income tax law.
4.22 Despite the retrospective application of DGR status, there is no adverse impact on affected parties or the entities. This is because the amendments assist entities to obtain support from the public and allow parties that provide gifts to obtain an income tax deduction if eligibility requirements are met.