Explanatory Memorandum
(Circulated by authority of the Minister for Revenue and Financial Services, Minister for Women and Minister Assisting the Prime Minister for the Public Service, the Hon Kelly O'Dwyer MP)Chapter 9 Deductible gift recipients
Outline of chapter
9.1 Schedule 9 to this Bill amends the ITAA 1997 to include three entities as DGRs. These are the Australian Philanthropic Services Limited, Foundation 1901 Limited and Sydney Chevra Kadisha.
Context of amendments
Deductible gift recipient status
9.2 The income tax law allows income tax deductions for taxpayers who make gifts of $2 or more to a DGR. DGRs are entities which fall within one of the general categories set out in Division 30 of the ITAA 1997 or are specifically listed by name in that Division.
9.3 DGR status helps eligible organisations attract public financial support for their activities.
Australian Philanthropic Services Limited
9.4 Australian Philanthropic Services Limited is a registered charity that sets up and administers private ancillary funds for individuals and families as well as educating individuals, foundations and advisers concerning ancillary funds and the making of philanthropic grants.
Foundation 1901 Limited
9.5 Foundation 1901 Limited is a registered charity established to engage with and educate Australians about federation. It engages with Australians through education campaigns to maximise understanding of the lessons from the history of federation and its continued importance to Australians.
Sydney Chevra Kadisha
9.6 Sydney Chevra Kadisha is a registered charity that provides funeral services to the Jewish community of New South Wales irrespective of an individual's ability to pay, by providing subsidised or free burial services and plots to the most needy within the Jewish community.
Summary of new law
9.7 The amendments include Australian Philanthropic Services Limited, Foundation 1901 Limited and Sydney Chevra Kadisha as DGRs under the income tax law.
Detailed explanation of new law
Australian Philanthropic Services Limited
9.8 Taxpayers may claim an income tax deduction for gifts made to Australian Philanthropic Services Limited provided the gift complies with the existing requirements of the income tax law. [Schedule 9, item 1, table item 11.2.10 in the table in section 30-95 of the ITAA 1997]
9.9 This amendment ensures that Australian Philanthropic Services Limited receives appropriate support through the Commonwealth tax system for assisting philanthropists to create new ancillary funds in Australia.
Foundation 1901 Limited
9.10 Taxpayers may claim an income tax deduction for gifts made to Foundation 1901 Limited provided the gift complies with the existing requirements of the income tax law. [Schedule 9, item 3, table item 13.2.23 in the table in section 30-105 of the ITAA 1997]
9.11 This amendment ensures that Foundation 1901 Limited receives appropriate support through the Commonwealth tax system for researching and helping Australians understand the lessons from federation history.
Sydney Chevra Kadisha
9.12 Taxpayers may claim an income tax deduction for gifts made to Sydney Chevra Kadisha provided the gift complies with the existing requirements of the income tax law. [Schedule 9, item 2, table item 12.2.5 in the table in subsection 30-100(2) of the ITAA 1997]
9.13 This amendment ensures that Sydney Chevra Kadisha receives appropriate support through the Commonwealth tax system for providing Jewish burials in New South Wales.
Consequential amendments
9.14 Schedule 9 also amends the index for Division 30 of the ITAA 1997 to reflect the new listings. [Schedule 9, items 4 to 6, table items 24C, 49C and 112B of the table in section 30-315 of the ITAA 1997]
Application and transitional provisions
9.15 The amendments apply to gifts made to Australian Philanthropic Services Limited on or after 1 July 2016. [Schedule 9, item 1, third column of table item 11.2.10 in section 30-95 of the ITAA 1997]
9.16 The amendments apply to gifts made to Foundation 1901 Limited between 1 September 2016 and 31 August 2021 inclusive. [Schedule 9, item 3, third column of table item 13.2.23 in section 30-105 of the ITAA 1997]
9.17 The amendments apply to gifts made to Sydney Chevra Kadisha between 1 January 2018 and 31 December 2019 inclusive. [Schedule 9, item 2, third column of table item 12.2.5 in subsection 30-100(2) of the ITAA 1997]
9.18 The amendments apply retrospectively. This ensures that gifts made to the entities from the above application dates qualify for income tax deductions provided the gifts comply with all requirements of the income tax law. The changes are wholly beneficial both to taxpayers making gifts of $2 or more to these DGRs and also to the DGR entities that receive these gifts.
9.19 The amendments commence on the first day of the first quarterly period following Royal Assent. [Clause 2]