Explanatory Memorandum
(Circulated by authority of the Assistant Minister for Competition, Charities and Treasury, the Hon Dr Andrew Leigh MP)Chapter 1: Deductible gift recipients
1.1 Schedule 1 to the Bill amends the ITAA 1997 to:
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- list Melbourne Business School Limited, Leaders Institute of South Australia Incorporated, St Patrick's Cathedral Melbourne Restoration Fund, Jewish Education Foundation (Vic) Ltd, Australian Education Research Organisation Limited, and Australians for Indigenous Constitutional Recognition Ltd as deductible gift recipients;
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- extend the deductible gift recipient listings of Sydney Chevra Kadisha and Australian Women Donors Network; and
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- remove the deductible gift recipient listing of the Mt Eliza Graduate School of Business and Government Limited.
Context of amendments
1.2 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 listed by name in that Division.
1.3 Deductible gift recipient status helps eligible organisations attract public financial support for their activities.
1.4 Melbourne Business School Limited (ABN 80 007 268 233) is a charity that operates as a graduate business school to provide degrees and short courses and conduct research and consulting activities relevant for the Australian and international business community.
1.5 Leaders Institute of South Australia Incorporated (ABN 93 093 281 641) is a charity which seeks to develop impactful leaders in South Australia by encouraging self-awareness and providing opportunities to experience alternative perspectives.
1.6 St Patrick's Cathedral Melbourne Restoration Fund (ABN 83 460 705 615) is a charity operating as a discretionary investment trust to maintain, preserve and restore the building and facilities of St Patrick's Cathedral Melbourne. The entity also promotes St Patrick's Cathedral Melbourne as a place of historic and cultural significance, place of worship and religious instruction, and as a venue for culture, artistry, and community.
1.7 Jewish Education Foundation (Vic) Ltd (ABN 91 654 198 375) is a charity that represents a cross section of the Victorian Jewish Community and supports Jewish schools and education, including through the provision of scholarships.
1.8 Australian Education Research Organisation Limited (ABN 83 644 853 369) supports Australian education by generating, presenting, and encouraging the adoption of evidence-based education.
1.9 Australians for Indigenous Constitutional Recognition Ltd (ABN 70 636 542 204) is a charity which seeks to empower Indigenous Australians to fully participate in Australian economic and social life including through developing educational material and promotion of the Uluru Statement and Indigenous constitutional recognition.
1.10 Sydney Chevra Kadisha (ABN 65 000 029 541) is a charity which attends to Jewish burials to ensure they are undertaken in accordance with rites and ceremonies of the Jewish faith.
1.11 Australian Women Donors Network (ABN 28 141 197 471) is a charity which promotes the funding of projects and charities which specifically address the needs of women and girls and advocate for the contribution of women to philanthropic causes.
1.12 The Mt Eliza Graduate School of Business and Government Limited has ceased operation and its activities are being carried out by the Melbourne Business School Limited which is its parent company.
Summary of new law
1.13 Schedule 1 to the Bill amends the ITAA 1997 to allow the following entities to be listed as deductible gift recipients under the income tax law:
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- Melbourne Business School Limited;
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- Leaders Institute of South Australia Incorporated;
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- St Patrick's Cathedral Melbourne Restoration Fund;
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- Jewish Education Foundation (Vic) Ltd;
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- Australian Education Research Organisation Limited; and
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- Australians for Indigenous Constitutional Recognition Ltd.
1.14 Schedule 1 to the Bill amends the ITAA 1997 to extend the period in which Sydney Chevra Kadisha is a deductible gift recipient under the income tax law.
1.15 Schedule 1 to the Bill amends the ITAA 1997 to extend the period in which Women Donors Network is a deductible gift recipient under the income tax law.
1.16 Schedule 1 to the Bill amends the ITAA 1997 to remove the Mt Eliza Graduate School of Business and Government Limited as a specifically listed deductible gift recipient under the income tax law.
Detailed explanation of new law
1.17 Taxpayers may claim an income tax deduction for gifts made to the Melbourne Business School Limited (ABN 80 007 268 233) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that the Melbourne Business School Limited receives public financial support for their activities. [Schedule 1, item 2, table item 2.2.58 in subsection 30-25(2)]
1.18 Taxpayers may claim an income tax deduction for gifts made to the Leaders Institute of South Australia Incorporated (ABN 93 093 281 641) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that the Leaders Institute of South Australia Incorporated receives public financial support for their activities. [Schedule 1, item 5, table item 13.2.35 in section 30-105]
1.19 Taxpayers may claim an income tax deduction for gifts made to the St Patrick's Cathedral Melbourne Restoration Fund (ABN 83 460 705 615) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that the St Patrick's Cathedral Melbourne Restoration Fund receives public financial support for their activities. [Schedule 1, item 5, table item 13.2.36 in section 30-105]
1.20 Taxpayers may claim an income tax deduction for gifts made to the Jewish Education Foundation (Vic) Ltd (ABN 91 654 198 375) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that the Jewish Education Foundation (Vic) Ltd receives public financial support for their activities. [Schedule 1, item 2, table item 2.2.57 in subsection 30-25(2)]
1.21 Taxpayers may claim an income tax deduction for gifts made to the Australian Education Research Organisation Limited (ABN 83 644 853 369) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that the Australian Education Research Organisation Limited receives public financial support for their activities. [Schedule 1, item 2, table item 2.2.56 in subsection 30-25(2)]
1.22 Taxpayers may claim an income tax deduction for gifts made to Australians for Indigenous Constitutional Recognition Ltd (ABN 70 636 542 204) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that the Australians for Indigenous Constitutional Recognition Ltd receives public financial support for their activities. [Schedule 1, item 5, table item 13.2.34 in section 30-105]
1.23 Taxpayers may claim an income tax deduction for gifts made to Sydney Chevra Kadisha (ABN 65 000 029 541) 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 Sydney Chevra Kadisha continues to receive public financial support for their activities. [Schedule 1, item 4, table item 12.2.5 in subsection 30-100(2)]
1.24 Taxpayers may claim an income tax deduction for gifts made to Sydney Australian Women Donors Network (ABN 28 141 197 471) 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 Australian Women Donors Network continues to receive public financial support for their activities. [Schedule 1, item 3, table item 11.2.11 in section 30-95]
1.25 Mt Eliza Graduate School of Business and Government Limited (ABN 27 008 394 732) has ceased to operate as a provider of business administration programs. [Schedule 1, item 1, table item 2.2.24 in subsection 30-25(2)]
Consequential amendments
1.26 Schedule 1 to the Bill also amends the index for Division 30 of the ITAA 1997 to reflect the amendments. [Schedule 1, items 6 - 11, table items 21AAA, 26A, 63C, 65AB, 72AAAA and 112AB in section 30-315]
Commencement, application, and transitional provisions
Commencement
1.27 The amendments commence on the first day of the quarter following Royal Assent. [Clause 2]
Application
1.28 The amendments apply to gifts made on or after 1 July 2022 to the Melbourne Business School Limited. [Schedule 1, item 2, table item 2.2.58 in subsection 30-25(2)]
1.29 The amendments apply to gifts made on or after 1 July 2022 and on or before 30 June 2027 to the Leaders Institute of South Australia Incorporated. [Schedule 1, item 5, table item 13.2.35 in section 30-105]
1.30 The amendments apply to gifts made on or after 1 July 2022 and on or before 30 June 2027 to the St Patrick's Cathedral Melbourne Restoration Fund. [Schedule 1, item 5, table item 13.2.36 in section 30-105]
1.31 The amendments apply to gifts made on or after 1 July 2021 and on or before 30 June 2026 to the Jewish Education Foundation (Vic) Ltd. [Schedule 1, item 2, table item 2.2.57 in subsection 30-25(2)]
1.32 The amendments apply to gifts made on or after 1 July 2021 to the Australian Education Research Organisation Limited. [Schedule 1, item 2, table item 2.2.56 in subsection 30-25(2)]
1.33 The amendments apply to gifts made on or after 1 July 2022 and on or before 30 June 2025 to Australians for Indigenous Constitutional Recognition Ltd. [Schedule 1, item 5, table item 13.2.34 in section 30-105]
1.34 The amendments apply retrospectively. This ensures that if gifts were made prior to the commencement of this Schedule they may be tax deductible for income tax purposes, provided they comply with other requirements of the income tax law. Accordingly, despite the retrospective application of deductible gift recipient status there is no adverse impact on affected parties or the entities as they amendments assist entities to obtain support from the public and allow parties that provide gifts to obtain an income tax deduction if eligibility requirements are met. The removal of deductible gift recipient status for the Mt Eliza Graduate School of Business and Government Limited applies prospectively.