Exposure draft: requiring DGRs to register as charity

October 24, 2020

The government is seeking comments on draft legislation to require non-government entities seeking endorsement as deductible gift recipients (DGRs) to register as charities.

The draft legislation amends ITAA 1997 to require a fund, authority or institution that is operated by a non-government entity seeking endorsement as a DGR (other than an ancillary fund) to be a charity registered with the Australian Charities and Not-for-profits Commission (ACNC) or operated by a registered charity. This requirement already applies to 41 of the 52 general DGR categories. It will now be expanded to 11 general DGR categories in Subdiv 30-B, including health, education, welfare, environment and cultural organisations, making charity registration a prerequisite for all funds seeking DGR endorsement under the general DGR categories.

The amendments will apply three months from the date of assent of the amending legislation but transitional provisions allow additional time (12 months, or more) for existing entities and new DGR applicants to meet the registration requirement.