All DGRs to be registered charities

The Commonwealth Treasury has released exposure draft legislation amending the Income Tax Assessment Act 1997 (Cth) (ITAA). If adopted the exposure draft legislation will require organisations seeking endorsement as a deductible gift recipient (DGR) to be registered as a charity with the Australian Charities and Not-for-profit Commission (ACNC) as a prerequisite to eligibility.

The proposed amendment will only impact a limited number of DGRs, as 41 of the 52 general categories of DGRs under the ITAA require the organisation to be registered as a charity with the ACNC. The draft legislation will expand the requirement to the remaining 11 general DGR categories in Subdivision 30-B ITAA including health, education, research, welfare and rights, emergency services, environmental and cultural organisations.

This reform is aimed at ensuring consistency of regulation, governance and oversight of all DGRs, while simultaneously reducing duplicative reporting requirements and unnecessary compliance costs.

The proposed amendment will take effect 3 months after the enacting legislation receives royal ascent. If your organisation currently holds DGR status under one of the above categories, you will have a transitional period of 12 months to register as a charity with the ACNC, unless granted a further extension from the Commissioner of Taxation.

If your organisation is thinking about applying for DGR status under one of the above categories, steps should be taken to register as a charity with the ACNC as part of the application process.

For further information please contact:

Paul Gray
Principal
T: 03 5225 5231
E: pgray@ha.legal

Alexander Gulli
Lawyer
T: 03 5226 8573
E: agulli@ha.legal