Following the release of its consultation paper on potential Deductible Gift Recipient (DGR) reforms in June this year, the Government has now announced its intended changes.
Significantly, the Australian Charities and Not-for-profits Commission (ACNC) will become responsible for the administration of all DGRs. This will include integrating the four existing DGR registers into the ACNC charity register. The four registers are:
- Overseas aid gift deduction scheme
- Register of environmental organisations
- Register of cultural organisations
- Register for harm prevention charities.
Once the changes are implemented, these charities will only report to the ACNC. The information currently collected by the Departments responsible for the DGR registers will be collected by the ACNC as part of the Annual Information Statement. It was the Government’s original intention to transfer the registers to the Australian Taxation Office. However, as we argued in our submission to Government on the proposed reforms, we believe using the ACNC is the most efficient and effective organisation for administering DGRs.
From 1 July 2019, all DGRs that are not currently charities will automatically be registered with the ACNC. Accordingly all DGRs will be required to comply with the ACNC’s governance standards and will be need to complete an Annual Information Statement. There is a 12 month transitional period to assist these charities to meet their compliance obligations.
The Government is not proceeding with its intention to require environmental organisations to commit to a minimum percentage of their annual expenditure to environmental remediation. However, the ACNC will publish charities’ declarations of political expenditure to the Australian Electoral Commission.
The Government will also abolish the public fund requirements that currently exist for many charities. This change will make it easier for charities to find appropriate people willing to join their public fund committees.
At this stage, the Government has provided minimum information on the implementation process for these reforms. We will provide additional details when they become available.