Explanatory Memorandum
(Circulated by authority of the Assistant Treasurer, Minister for Housing and Minister for Homelessness, Social and Community Housing, the Hon Michael Sukkar MP)Chapter 15: Deductible gift recipients
Outline of chapter
15.1 Schedule 7 to the Bill amends the ITAA 1997 to:
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- specifically list the Greek Orthodox Community of New South Wales Ltd, Australian Associated Press Ltd, Virtual War Memorial Limited and SU Australia Ministries Limited as deductible gift recipients;
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- extend the deductible gift recipient specific listings of Cambridge Australia Scholarships Limited and Foundation 1901 Limited; and
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- remove the deductible gift recipient specific listing of The East African Fund Limited (with the fund remaining endorsed as a deductible gift recipient under another category).
Context of amendments
15.2 The income tax law allows income tax deductions for taxpayers who make gifts of $2 or more to deductible gift recipients. To be a deductible gift recipient, an organisation must fall within one of the general categories set out in Division 30 of the ITAA 1997 or be specifically listed by name in that Division.
15.3 Becoming a deductible gift recipient status helps eligible organisations attract public financial support for their activities.
15.4 The Greek Orthodox Community of New South Wales Ltd (ABN 50 000 018 128) is a charity that provides for the spiritual, cultural, educational and welfare needs of the Greek Australian community. Its activities include managing care facilities, running Greek language programs, maintaining churches and a Hellenic historical centre, and organising the Greek film festival.
15.5 Australian Associated Press Ltd (ABN 94 641 582 121) is a charity that operates as a national news agency and content producer. It provides editorial and business solutions to Australian and international media and corporate sectors.
15.6 Virtual War Memorial Limited (ABN 89 613 555 347) is a charity that operates as a digital memorial to honour the personal experiences of those who have served Australia in times of conflict. It seeks to present the socio-military history in a way that engages and educates individuals and communities.
15.7 SU Australia Ministries Limited (ABN 74 009 669 569) is a charity that supports and connects children, young people and their families through local schools, churches, and community groups
15.8 Cambridge Australia Scholarships Limited (ABN 71 146 517 366) is a charity that provides scholarships for outstanding Australian graduates to undertake further studies at the University of Cambridge, England.
15.9 Foundation 1901 Limited (ABN 40 602 317 117) is a charity that seeks to commemorate the past, present, and future of Australia's Federation. It promotes awareness and understanding of the ongoing importance of the federation through research, competition, and scholarships.
15.10 The East African Fund Limited, currently operating as The School of St Jude Limited (ABN 53 620 147 775) is a charity that provides free education to children in Tanzania who are otherwise unlikely to attend or complete schooling due to extreme poverty.
Summary of new law
15.11 Schedule 7 to the Bill amends the ITAA 1997 to allow the following entities to be specifically listed as deductible gift recipients under the income tax law:
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- The Greek Orthodox Community of New South Wales Ltd;
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- Australian Associated Press Ltd;
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- Virtual War Memorial Limited; and
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- SU Australia Ministries Limited.
15.12 Schedule 7 to the Bill amends the ITAA 1997 to extend the period in which the following entities are specifically listed deductible gift recipients under the income tax law:
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- Cambridge Australia Scholarships Limited; and
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- Foundation 1901 Limited.
15.13 Schedule 7 to the Bill amends the ITAA 1997 to remove the following entity as a specifically listed deductible gift recipient under the income tax law:
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- the East African Fund Limited.
Detailed explanation of new law
15.14 Taxpayers may claim an income tax deduction for gifts made to the Greek Orthodox Community of New South Wales Ltd (ABN 50 000 018 128) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that the Greek Orthodox Community of New South Wales Ltd receives public financial support for their activities. [Schedule 7, item 7, section 30-105 of ITAA 1997]
15.15 Taxpayers may claim an income tax deduction for gifts made to Australian Associated Press Ltd (ABN 94 641 582 121) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that Australian Associated Press Ltd receives public financial support for their activities. [Schedule 7, item 6, section 30-105 of ITAA 1997]
15.16 Taxpayers may claim an income tax deduction for gifts made to Virtual War Memorial Limited (ABN 89 613 555 347) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that Virtual War Memorial Limited receives public financial support for their activities. [Schedule 7, item 2, section 30-50 of ITAA 1997]
15.17 Taxpayers may claim an income tax deduction for gifts made to SU Australia Ministries Limited (ABN 74 009 669 569) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that SU Australia Ministries Limited receives public financial support for their activities. [Schedule 7, item 1, section 30-25 of ITAA 1997]
15.18 Taxpayers may claim an income tax deduction for gifts made to Cambridge Australia Scholarships Limited (ABN 71 146 517 366) for a longer period than initially provided when it was first listed as a deductible gift recipient, provided the gift complies with the existing requirements of the income tax law. This amendment ensures that Cambridge Australia Scholarships Limited continues to receive public financial support for their activities. [Schedule 7, item 4, section 30-80 of ITAA 1997]
15.19 Taxpayers may claim an income tax deduction for gifts made to Foundation 1901 Limited (ABN 40 602 317 117) for a longer period than initially provided when it was first listed as a deductible gift recipient, provided the gift complies with the existing requirements of the income tax law. This amendment ensures that Foundation 1901 Limited continues to receive public financial support for their activities. [Schedule 7, item 5, section 30-105 of ITAA 1997]
15.20 The East African Fund Limited, currently operating as The School of St Jude Limited (ABN 53 620 147 775) has been registered as a public benevolent institution by the Australian Charities and Not-for-profits Commission. On this basis, the ATO has endorsed this charity to be a deductible gift recipient in the general category of Welfare and rights under section 30-45 of the ITAA 1997. Therefore, its specific listing is removed as it is no longer required. [Schedule 7, item 3, section 30-80 of ITAA 1997]
Consequential amendments
15.21 Schedule 7 also amends the index for Division 30 of the ITAA 1997 to reflect the amendments. [Schedule 7, items 8-12, section 30-315 of ITAA 1997]
Application and transitional provisions
Commencement
15.22 The amendments commence on the first day of the quarter following Royal Assent.
Application
15.23 The amendments apply to gifts made on or after 1 July 2019 to the Greek Orthodox Community of New South Wales Ltd.
15.24 The amendments apply to gifts made on or after 1 July 2021 and before 1 July 2026 to Australian Associated Press Ltd and Virtual War Memorial Limited.
15.25 The amendments apply to gifts made on or after 1 July 2021 and before 1 July 2023 to SU Australia Ministries Limited.
15.26 The amendments extend the period of the listing of Cambridge Australia Scholarships Limited so that it applies to gifts made on or after 1 July 2021 and before 1 July 2026.
15.27 The amendments extend the period of the listing of Foundation 1901 Limited so that it applies to gifts made on or after 1 September 2021 and before 1 September 2026.
15.28 The amendments apply retrospectively. This ensures that if gifts are made to entities during the application dates given above, they may be tax deductible for income tax purposes, provided they comply with other requirements of the income tax law.