House of Representatives

Explanatory Memorandum

Circulated By the Authority of the Treasurer, the Hon Wayne Swan MP

Chapter 4 - Deductible gift recipients

Outline of chapter

4.1 Schedule 4 to this Bill amends the Income Tax Assessment Act 1997 ( ITAA 1997) to update the list of deductible gift recipients (DGRs) to include two new entities, and extend the period for which another DGR may collect deductible gifts.

Context of amendments

4.2 The income tax law allows taxpayers who make gifts of $2 or more to DGRs to claim income tax deductions. To be a DGR, an organisation must fall within one of the general categories set out in Division 30 of the ITAA 1997, or be listed by name under that Division.

4.3 DGR status assists eligible funds and organisations to attract public support for their activities.

Summary of new law

4.4 These amendments add two organisations to the list of specifically listed DGRs. The amendments also extend the period for which another organisation may collect deductible gifts for another three years.

Detailed explanation of new law

4.5 This Schedule allows deductions for gifts to the organisations listed in Table 4.1 from the dates of effect and subject to the special conditions in the Table . [Schedule 4, items 1 and 2, items 9.2.22 and 9.2.23 in the table in subsection 30-80(2) of the ITAA 1997]

Table 4.1

4.6 The Sichuan Earthquake Surviving Children's Fund aims to raise money by donations from the public in Australia to be used to provide assistance in the reconstruction of schools in the Sichuan Province in China and provide assistance for children in the Sichuan Province, following an earthquake on 12 May 2008.

4.7 The Bali Peace Park Association Inc. aims to raise funds to acquire the Sari Club site, Bali, Indonesia, and create a 'peace park' on the land where the terrorist bomb was detonated on 12 October 2002 and to create an annual national awareness day on 12 October to allow for reflection and acknowledgement of the terrorist attack while promoting tolerance and understanding across cultures and religions.

4.8 This Schedule also extends the date until which the Yachad Accelerated Learning Project Limited may collect deductible gifts from 1 July 2009 to 1 July 2012 . [Schedule 4, item 5, item 9.2.34 in the table in subsection 30-25(2) of the ITAA 1997]

Application and transitional provisions

4.9 The amendments to list the organisations in Table 4.1 apply from the dates of effect shown in that table . [Schedule 4, items 6 and 7]

Consequential amendments

4.10 A number of changes have been made to update the index of DGRs to include the new entities . [Schedule 4, items 3 and 4, section 30-315]