Whilst still Minister for Revenue and Financial Services, Kelly O’Dwyer announced the Government was taking action to deliver its package of reforms (announced 5.12.17) for the administration and oversight of organisations with Deductible Gift Recipient (DGR) status – broadly by requiring them to all register with the Australian Charities and Not-for-profits Commission (ACNC).

Treasury released a consultation paper covering the following components of the Government’s broader package of DGR reforms:

  • the requirement for non-government organisations with DGR status to register as a charity with the ACNC from 1 July 2019
  • transition arrangements to support existing organisations with DGR status to register as a charity with the ACNC
  • the Commissioner of Taxation’s discretion to exempt organisations with DGR status from the requirement to register as a charity in limited circumstances
  • the abolish certain public fund requirements.

Guidance material, from the Australian Taxation Office and the ACNC on the practical application of the proposed implementation of the DGR reforms in due course.

Why DGRs should register as charities with the ACNC

  • The majority of the approximately 28,500 DGRs are already charities or government organisations. Of the 51 categories of DGRs, all but 11 of them already require an entity to be a Government organisation or a charity registered with the ACNC.
  • Only approximately 1,000 non-government DGRs in those 11 categories are not registered charities. Making charity registration a prerequisite for DGR status will strengthen governance requirements and provide consistent, clear administrative and regulatory requirements for all DGRs.
  • Currently, reporting and governance requirements for DGRs may overlap and multiple regulators have different requirements, which place an unnecessary administrative burden on DGRs. Making all non-government DGRs be charities ensures consistent levels of reporting and oversight and enables abolition of duplicative requirements.

Submissions on the proposed design of the reforms and notes that submissions conclude on 21 September 2018.

External conduct standards for charities operating abroad – Treasury also notes that d to know the exposure draft regulations and explanatory statement for external conduct standards, which charities registered with the ACNC, will need to comply with, when operating outside Australia, have also been released for consultation, with the same 21 September 2018 submissions closure date.

FJM 8.9.18

[Minister’s website: DGR Consultation Media Release; Treasury Website: DGR Consultation Page, Consultation Paper, Frequently Asked Questions; LTN 161, 8/9/18; Tax Month – August 2018]

Comprehension questions (answers available)

  1. From what date will remaining DGR’s have to register with the ACNC?
  2. How many DGRs will be affected?
  3. Will some ‘public fund’ requirements be abolished?
  4. Are ‘external conduct standards’ when operating in Australia, also part of the DGR reforms (albeit with a different form of consultation)?



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