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Reforming administration of tax deductible gift recipients

Reforms – tax deductible gift recipients

Daniela Chiew and Catherine Dean examine key reforms to the administration of tax deductible gift recipients (DGR).


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On 5 December 2017, the Federal Government announced reforms relating to the administration and conduct standards for organisations with Deductible Gift Recipient (DGR) status.

With donations to DGRs totalling over $1.3 billion in 2016-17, the announcement highlighted that the reforms were being introduced to strengthen governance arrangements in the sector. Importantly, the Australian Charities and Not-for-profits Commission (ACNC) and the Australian Taxation Office (ATO) will receive additional funding to be able to review a greater number of DGRs.

Some of the key reforms include:

  • Automatic registration of all non-government DGRs as charities with the ACNC from 1 July 2019, with a 12 month transitional period. The Commissioner of Taxation may in some circumstances exempt DGRs from this requirement. 
  • Removal of duplicate reporting requirements, with the DGR register and the Overseas Aid Gift Deduction Scheme being merged with the ACNC charity register. 
  • Introduction of external conduct standards for DGRs, including enforcement of these standards by the ACNC in order to strengthen oversight of overseas activities. These external conduct standards have yet to be developed and are not current obligations. 
  • To improve transparency, the ACNC will publish charities’ declarations to the Australian Electoral Commissioner of their political expenditure, and also publish relevant criminal activities of charities’ staff as disclosed in the Annual Information Statement (AIS).
  • The disclosure of environmental reporting requirements by environmental organisations in the AIS (although no level of environmental remediation will be mandated).
  • The amendment of eligibility criteria for the Register of Cultural Organisations (ROCO) to permit organisations promoting Indigenous languages to be endorsed as DGRs.

The Government has stated that it will consult on details of the implementation of the announced DGR reforms. Entities registered as DGRs should consider the impact of these reforms as a priority, in particularly in relation to their reporting requirements and corporate governance standards.

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