Explanatory Memorandum
(Circulated by authority of the Assistant Treasurer and Minister for Financial Services, the Hon Stephen Jones MP)Chapter 5: Deductible gift recipients
Outline of chapter
5.1 Schedule 5 to the Bill amends the ITAA 1997 to list as deductible gift recipients:
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- Australian Democracy Network Ltd; and
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- Australian Science Media Centre Incorporated; and
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- Centre for Australian Progress Ltd; and
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- Combatting Antisemitism Fund Limited; and
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- Ethnic Business Awards Foundation Limited; and
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- International Campaign to Abolish Nuclear Weapons, Australia Inc.; and
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- Ourschool Ltd; and
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- Susan McKinnon Charitable Foundation Ltd; and
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- Tasmanian Leaders Inc.; and
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- The Hillview Foundation Australia Limited.
Context of amendments
5.2 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.
5.3 Deductible gift recipient status helps eligible organisations attract public financial support for their activities.
5.4 Australian Democracy Network Ltd (ABN 35 655 372 133) is a charity that aims to support the strength of Australian democracy through law reform advocacy, and promotion of civil society participation and accountable government.
5.5 Australian Science Media Centre Incorporated (ABN 61 630 690 296) is a charity that seeks to enhance the quality and accuracy of coverage in the media by linking journalists writing about science with scientific experts.
5.6 Centre for Australian Progress Ltd (ABN 76 158 172 484) is a charity that supports civil society participants to strengthen their advocacy and foster community connections which positively impact the health of Australian democracy.
5.7 Combatting Antisemitism Fund Limited (ABN 37 674 413 622) is a charity that seeks to combat antisemitism in Australia and educate the broader public about antisemitism.
5.8 Ethnic Business Awards Foundation Limited (ABN 13 627 348 976) is a charity that seeks to acknowledge the contributions made to the Australian economy and community by Indigenous and migrant entrepreneurs.
5.9 International Campaign to Abolish Nuclear Weapons, Australia Inc. (ABN 96 291 421 937) is a charity that advocates for the prohibition of nuclear weapons, and adherence to and implementation of the United Nations Treaty on the Prohibition of Nuclear Weapons.
5.10 Ourschool Ltd (ABN 47 633 875 288) is a charity that seeks to benefit high school students by supporting public high schools to establish and grow their alumni networks.
5.11 Susan McKinnon Charitable Foundation Ltd (ABN 12 653 756 597) is a charity that seeks to nurture a transparent, effective and fit-for-purpose political and policy landscape in Australia.
5.12 Tasmanian Leaders Inc. (ABN 65 917 243 507) is a charity that aims to contribute to the development of leadership skills and abilities by delivering a series of leadership programs and connecting leaders across communities.
5.13 The Hillview Foundation Australia Limited (ABN 27 675 950 606) is a charity that seeks to promote sustainable urbanism, protect and regenerate Australia's built heritage, and facilitate the improvement of welfare through education and training programs relating to sustainability, the environment, traditional heritage trades, building crafts, and design and art principles.
Summary of new law
5.14 Schedule 5 to the Bill amends the ITAA 1997 to list the following entities as deductible gift recipients under the income tax law:
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- Australian Democracy Network Ltd; and
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- Australian Science Media Centre Incorporated; and
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- Centre for Australian Progress Ltd; and
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- Combatting Antisemitism Fund Limited; and
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- Ethnic Business Awards Foundation Limited; and
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- International Campaign to Abolish Nuclear Weapons, Australia Inc.; and
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- Ourschool Ltd; and
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- Susan McKinnon Charitable Foundation Ltd; and
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- Tasmanian Leaders Inc.; and
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- The Hillview Foundation Australia Limited.
Detailed explanation of new law
5.15 Taxpayers may claim an income tax deduction for gifts made to Australian Democracy Network Ltd (ABN 35 655 372 133) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that Australian Democracy Network Ltd receives public financial support for its activities. [Schedule 5, items 13 and 14, table item 13.2.40 in section 30-105]
5.16 Taxpayers may claim an income tax deduction for gifts made to Australian Science Media Centre Incorporated (ABN 61 630 690 296) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that Australian Science Media Centre Incorporated receives public financial support for its activities. [Schedule 5, items 13 and 14, table item 13.2.41 in section 30-105]
5.17 Taxpayers may claim an income tax deduction for gifts made to Centre for Australian Progress Ltd (ABN 76 158 172 484) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that Centre for Australian Progress Ltd receives public financial support for its activities. [Schedule 5, items 13 and 14, table item 13.2.42 in section 30-105]
5.18 Taxpayers may claim an income tax deduction for gifts made to Combatting Antisemitism Fund Limited (ABN 37 674 413 622) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that Combatting Antisemitism Fund Limited receives public financial support for its activities. [Schedule 5, items 13 and 14, table item 13.2.43 in section 30-105]
5.19 Taxpayers may claim an income tax deduction for gifts made to Ethnic Business Awards Foundation Limited (ABN 13 627 348 976) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that Ethnic Business Awards Foundation Limited receives public financial support for its activities. [Schedule 5, item 2, table item 7.2.6 in section 30-65]
5.20 Taxpayers may claim an income tax deduction for gifts made to International Campaign to Abolish Nuclear Weapons, Australia Inc. (ABN 96 291 421 937) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that International Campaign to Abolish Nuclear Weapons, Australia Inc. receives public financial support for its activities. [Schedule 5, items 13 and 14, table item 13.2.44 in section 30-105]
5.21 Taxpayers may claim an income tax deduction for gifts made to Ourschool Ltd (ABN 47 633 875 288) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that Ourschool Ltd receives public financial support for its activities. [Schedule 5, item 1, table item 2.2.59 in subsection 30-25(2)]
5.22 Taxpayers may claim an income tax deduction for gifts made to Susan McKinnon Charitable Foundation Ltd (ABN 12 653 756 597) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that Susan McKinnon Charitable Foundation Ltd receives public financial support for its activities. [Schedule 5, items 13 and 14, table item 13.2.45 in section 30-105]
5.23 Taxpayers may claim an income tax deduction for gifts made to Tasmanian Leaders Inc. (ABN 65 917 243 507) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that Tasmanian Leaders Inc. receives public financial support for its activities. [Schedule 5, item 1, table item 2.2.60 in subsection 30-25(2)]
5.24 Taxpayers may claim an income tax deduction for gifts made to The Hillview Foundation Australia Limited (ABN 27 675 950 606) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that The Hillview Foundation Australia Limited receives public financial support for its activities. [Schedule 5, items 13 and 14, table item 13.2.46 in section 30-105]
Consequential amendments
5.25 Schedule 5 to the Bill also amends the index (Subdivision 30-315) for Division 30 of the ITAA 1997 to reflect the amendments. [Schedule 5, items 3 to 12, table items 21AAAA, 26AA, 29AA, 34AAAA, 48AB, 57A, 63AAA, 81, 112A, 113A in section 30-315]
Commencement
5.26 Part 1 of Schedule 5 to the Bill commences on the day after the day the Bill receives the Royal Assent.
5.27 Item 13 of Part 2 of Schedule 5 to the Bill commences the later of: the start of the day after the Bill receives the Royal Assent; and immediately after the commencement of item 1 of Part 1 of Schedule 3 to the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023. However, the provision does not commence at all if item 1 of Part 1 of Schedule 3 to the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 commences after the day after the Bill receives the Royal Assent.
5.28 Item 14 of Part 2 of Schedule 5 to the Bill commences on the day after the Bill receives the Royal Assent. However, the provision does not commence at all if item 1 of Part 1 of Schedule 3 to the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 commences on or before the day after the Bill receives the Royal Assent.
5.29 This ensures that the amendments in Schedule 5 to the Bill and those amendments in Schedule 3 of the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 that renumber section 30-105 of the ITAA 1997 apply correctly. [Clause 2]
Application
5.30 In relation to Susan McKinnon Charitable Foundation Ltd the amendments apply to gifts made on or after 1 July 2023 and on or before 30 June 2028.
5.31 In relation to all other entities listed in Schedule 5 the amendments apply to gifts made on or after 1 July 2024 and on or before 30 June 2029.
5.32 Depending on the timing of Royal Assent of the Bill, some or all of these amendments apply retrospectively. This ensures that if gifts were made prior to the commencement of this Schedule but after the application of the amendments, they qualify for a tax deduction for income tax purposes, provided they comply with other requirements of the income tax law.
5.33 Despite the potential retrospective application of deductible gift recipient status, there is no adverse impact on affected parties or the entities as the amendments are wholly beneficial. This is because the 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.