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 does not 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. The amendments to the Income Tax Assessment Act 1997 transfer administrative responsibility of 4 unique DGR categories from other government departments to the ATO.
The changes take effect from 1 January 2024 and repeal provisions that require each of the 4 departments to maintain a separate register.
From 1 January 2024, transitional provisions are in place and apply to those organisations that:
- are already DGR endorsed in one of the 4 unique DGR categories
- have an application in-progress with one of the 4 government departments and have not been notified of an outcome of their request by 31 December 2023.
Organisations already DGR endorsed in one of the 4 unique DGR categories prior to 1 January 2024, remain endorsed if they continue to meet eligibility criteria.
Organisations that have an in-progress application with one of the 4 government departments will have their application transferred to us from 1 January 2024.
For more information refer to Transitional provisions.
Before the transition
Before 1 January 2024, the 4 unique categories will continue to be administered by other government departments as follows:
- 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 will assess eligibility for:
- cultural organisations
- environmental organisations
- harm prevention charities
- developing country relief funds or organisations (previously known as overseas aid funds).
We already administer 48 of the 52 DGR general categories set out in Division 30 of the Income Tax Assessment Act 1997. These changes mean we will administer all DGR categories, and this will:
- enable consistency of administration
- reduce red tape
- simplify the application process for organisations seeking DGR status.
We have worked with each government department to ensure a smooth transition in administration. Refreshed guidance on the eligibility requirements for the 4 unique categories will be available from 2 January 2024.
More information
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
It is proposed that the tax law be amended to establish a new class of deductible gift recipients for community foundations.
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
- endorsement by the Commissioner of Taxation under new ministerial guidelines.
Public consultation
Treasury opened public consultation on the exposure legislation between 28 June 2023 and 16 July 2023. The proposed amendments establish a:
- new general DGR category in the Income Tax Assessment Act 1997 for community charity funds
- compliance regime in the Taxation Administration Act 1953 accompanied with 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.
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- our new and refreshed guidance
- the progress of the proposed amendments.