Why reforms were made
The government has announced several reforms to the administration and oversight of organisations with DGR status.
Changes are designed to strengthen governance arrangements, reduce administrative complexity and ensure continued trust and confidence in the sector.
DGRs to be registered as a charity
On 13 September 2021, the Treasury Laws Amendment (2021 Measures No. 2) Act 2021External Link became law.
As a precondition for DGR endorsement, this Act amends the Income Tax Assessment Act 1997 to require a fund, authority or institution to be either:
- a registered charity
- an Australian Government agency
- operated by a registered charity or an Australian Government agency.
Before the amendments, a majority of DGR categories required non-government organisations to be registered as charities. The amendments extended this requirement to 11 general DGR categories. This measure doesn't apply to ancillary funds or DGRs specifically listed in the tax law.
For more information, see:
- Treasury submission – Requiring DGRs to register as charitiesExternal Link
- Australian Charities and Not-for-profits Commission (ACNC) factsheet – DGRs and the ACNCExternal Link
- what you need to do when you start a charityExternal Link.
DGR Registers Reform
On 28 June 2023, the Treasury Laws Amendment (Refining and Improving our Tax System) Act 2023 became law.
This Act amends the Income Tax Assessment Act 1997 to transfer administrative responsibility of 4 unique DGR categories from other government departments to the ATO.
These changes started on 1 January 2024 and repealed provisions that required each of the 4 departments to maintain a separate register.
From 1 January 2024, transitional provisions apply to those organisations that were already DGR endorsed in one of the 4 unique DGR categories prior 1 January 2024. These organisations remain endorsed if they continue to meet eligibility criteria.
Transitional provisions also apply to those organisations that had an in-progress application with one of the 4 government departments prior to 1 January 2024. These applications were transferred to us from 1 January 2024.
For more information refer to Transitional provisions.
Before the transition
Before 1 January 2024, the 4 unique DGR categories that were administered by other government departments were the:
- Register of Cultural Organisations – administered by the Department of Infrastructure, Transport, Regional Development, Communications and the Arts
- Register of Environmental Organisations – administered by the Department of Climate Change, Energy, the Environment and Water
- Register of Harm Prevention Charities – administered by the Department of Social Services
- Overseas Aid Gift Deductibility Scheme – administered by the Department of Foreign Affairs and Trade.
After the transition
From 1 January 2024, we started assessing DGR endorsement eligibility for all:
- cultural organisations
- environmental organisations
- harm prevention charities
- developing country relief funds or organisations (previously known as overseas aid funds).
These changes mean we now administer all 52 DGR categories set out in Division 30 of the Income Tax Assessment Act 1997.
For more information on the transition, see:
- Treasury Laws Amendment (Refining and Improving Our Tax System) Act 2023External Link
- the Minister's media release on 29 June 2023 – Streamlining the Deductible Gift Recipient RegistersExternal Link
- outcomes on Treasury consultation held between 19 January and 19 February 2023 – Deductible Gift Recipient (DGR) Registers ReformExternal Link
- DGR categories
- Transitional provisions.
DGR status for community foundations
On 28 June 2024, the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Act 2024External Link became law.
This Act amends the Income Tax Assessment Act 1997 and Taxation Administration Act 1953 to establish:
- two new general DGR categories for community charity trust and community charity corporations
- a requirement for a treasury minister to formulate guidelines for the 2 new DGR categories.
These amendments started on 29 June 2024.
Public consultation
Treasury opened public consultation on the exposure draft guidelines and accompanying explanatory material on 5 November 2024.
The exposure draft guidelines outline proposed requirements for:
- governance
- record keeping
- allowed activities.
The consultation period is for 4 weeks. If you would like to submit a response to Treasury, you can do so by 3 December 2024.
You can find out how to respond and access the exposure draft guidelines and accompanying explanatory material via the Treasury websiteExternal Link.
Background
Originally announced by the previous government in the 2022–23 March Budget (PDF, 3.8MB)This link will download a file, it was proposed that the tax law be amended to specifically list up to 28 community foundations affiliated with the peak body Community Foundations Australia. The specific listing would be time-limited for 5 years, from 1 July 2022 to 30 June 2027.
A refined model was proposed in the 2023–24 Budget (PDF, 2.4MB)This link will download a file which includes:
- the removal of the 5-year time limit requirement
- DGR endorsement by the Commissioner of Taxation under new ministerial guidelines.
More information
For more information see:
- Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023External Link.
- Building Community – deductible gift recipient status for community foundationsExternal Link.
- Building Community – ministerial guidelines for community foundationsExternal Link.
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- our new and refreshed guidance
- the progress of the proposed amendments.