The Commonwealth Government has introduced the Treasury Laws Amendment (Refining and Improving Our Tax System) Bill 2023 into the House of Representatives.

If passed, the Bill transfers administration of four Deductible Gift Recipient (DGR) categories
(Environmental Organisations, Harm Prevention Charities, Cultural Organisations, and Overseas Aid Organisations) to the Australian Taxation Office, and repeals current provisions relating to separate maintenance of departmental registers for these categories.

Australia’s taxation system provides for donations to some organisations to be deductible from income tax. These organisations are referred to as DGRs.

DGR status allows an entity to receive tax deductible gifts and contributions from the public. Donors can claim an income tax deduction for donations of $2 or more to an organisation that has DGR status.

There are 52 general categories of DGR, and organisations must meet certain criteria to achieve endorsement as a DGR for the purposes of the Tax Act.

The ATO currently administers 48 of the 52 categories under which an organisation may be eligible for endorsement as a deductible gift recipient.

The amendments will make all deductible gift recipient categories consistent in administration, reducing the regulatory burden imposed on endorsed organisations and streamlining application and reporting requirements for organisations.

Applications for an organisation to be endorsed as a DGR in the 4 categories being transferred to the ATO categories are typically significantly slower than applications in other DGR categories. It currently takes up to two years to approve DGR status for an entity seeking to be added to one of the registers. This reform is expected to streamline the application and reporting requirements and reduce DGR approvals from up to two years to around one month.

If you found this article helpful, then subscribe to our news emails to keep up to date and look at our video courses for in-depth training. Use the search box at the top right of this page or the categories list on the right hand side of this page to check for other articles on the same or related matters.