The measure requiring all non-government DGRs to be registered with the Australian Charities and Not-for-profits Commission is currently before parliament. It is intended that, after passing through parliament, the amendments will commence three months following Royal Assent.
ATO key messages – Deductible Gift Recipients To Register As Charities
- The Treasury Laws Amendment (2021 Measures No. 2) Bill 2021 was introduced to Parliament on 17 March 2021. This includes an explanatory memorandum which contains more information about the policy intent of the measure.
- The legislative amendments facilitating DGRs to register as Charities will commence three months following Royal Assent.
- A transition period of 12 months will be provided to allow current DGRs to retain DGR status while they register as a charity with the ACNC.
- DGRs that have not successfully registered as charities with the ACNC within the 12 month transition period must apply for an ATO Commissioner’s time-limited exemption to maintain DGR endorsement.
- Applications for an exemption must be received within the 12 month transition period, and will be time-limited to an additional three years after the end of the initial 12 month transition period.
- DGRs will be able to indicate that they wish to apply to the ATO for the exemption in their ACNC application for charity registration. A streamlined process will enable the ACNC to forward relevant information to the ATO.
- Less than 2000 DGRs will be required to register as a charity with the ACNC in order to maintain their DGR status.
The remaining measures (relating to the transfer of the administration of the four DGR registers to the ATO and ACNC, and the removal of certain public fund requirements for DGRs) were placed on hold by the government and we have not been provided with a timeframe for when they will progress.
We understand the uncertainty for organisations that may wish to lodge a new DGR application under one of the categories administered by the four registers.
Given the unknown timeframe for the remaining reforms, our general advice for clients is to begin the application process with the registers if they are eligible for DGR endorsement under the current law requirements. The registers will continue to accept and process DGR applications until such time as the law is amended.
To view further detail on the ATO DGR Reform, click here