House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Treasurer, the Hon J. B. Hockey 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 specifically-listed deductible gift recipients (DGRs).

Context of amendments

4.2 The income tax law allows income tax deductions for taxpayers who make gifts of $2 or more to DGRs. To be a DGR, an entity 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.

4.3 DGR status helps eligible entities and funds attract public financial support for their activities.

Summary of new law

4.4 The amendments add the National Arboretum Canberra Fund and The Prince's Charities Australia Limited as specifically-listed DGRs, and extend the existing listing of the Bali Peace Park Association Inc..

4.5 Further, the amendments change the name for the specific listing of the Sir William Tyree Foundation of The Australian Industry Group to the Sir William Tyree Foundation.

Detailed explanation of new law

National Arboretum Canberra Fund (ABN 92 277 326 035)

4.6 Taxpayers may claim a tax deduction for gifts made to the National Arboretum Canberra Fund on or after 1 July 2013. [Schedule 4, item 3, item 12.2.4 in the table in subsection 30-100(2) of the ITAA 1997]

4.7 The National Arboretum Canberra Fund is a charitable trust maintained exclusively to support the National Arboretum Canberra.

Bali Peace Park Association Inc. (ABN 97 562 887 842)

4.8 Taxpayers may claim a tax deduction for gifts made to the Bali Peace Park Association Inc. after 15 December 2009. The current DGR specific listing for the Bali Peace Park Association Inc. covers the period after 15 December 2009 to before 17 December 2011. The amendment extends the time limitation from 17 December 2011 to 16 December 2014. [Schedule 4, item 2, item 9.2.23 in the table in subsection 30-80(2) of the ITAA 1997]

4.9 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.

Sir William Tyree Foundation (ABN 55 067 867 510)

4.10 Taxpayers may claim a tax deduction for gifts made to the Sir William Tyree Foundation from 1 March 1999. The current DGR specific listing for the Sir William Tryee Foundation is being updated to reflect a change of name of the Foundation from the Sir William Tyree Foundation of The Australian Industry Group to Sir William Tyree Foundation. [Schedule 4, item 1, item 2.2.18 in the table in subsection 30-25(2) of the ITAA 1997]

4.11 The Sir William Tyree Foundation funds certain academic positions within Australian universities or other appropriate educational institutions. The academic positions funded are directed at advancing knowledge in Australia in areas of innovation such as in general industry, engineering, electronics, construction, information technology, business and management practice, public or industry policy development and employer and employee relations.

The Prince's Charities Australia Limited (ABN 73 161 872 993)

4.12 Taxpayers may claim a tax deduction for gifts made to The Prince's Charities Australia Limited on or after 1 January 2014. [Schedule 4, item 4, item 13.2.20 in the table in section 30-105 of the ITAA 1997]

4.13 The Prince's Charities Australia Limited is a charitable institution maintained to coordinate the Prince of Wales' Australian and international charitable endeavours in Australia, and undertake a broad range of activities, modelled on those of the Prince's Trust in the United Kingdom.

4.14 These activities include supporting disadvantaged young people and veterans, the preservation of the built environment (particularly Australia's heritage buildings), promoting environmental sustainability, education and corporate social responsibility.

4.15 A condition on The Prince's Charities Australia Limited's listing is that it must not use tax deductible donations for activities stated in clause 2.1.3 of its constitution, namely to 'promote the development of sustainable communities including through the preservation and regeneration of the built environment, particularly Australia's heritage buildings'. This condition is enforceable under paragraph 353-20(4)(c) of the Taxation Administration Act 1953 .

Consequential amendments

4.16 The amendments have also updated the index in Division 30 to the ITAA 1997 to add or correct the new listings. [Schedule 4, items 5 to 7]

Application and transitional provisions

4.17 The listing of the National Arboretum Canberra Fund applies to gifts made on or after 1 July 2013.

4.18 The existing listing for the Bali Peace Park Association Inc., which expired on 17 December 2011, has been extended to 16 December 2014.

4.19 The listing of The Prince's Charities Australia Limited applies to gifts made on or after 1 January 2014.

4.20 These amendments commence on Royal Assent. STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Deductible gift recipients

4.21 This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview

4.22 Schedule 4 to this Bill amends the Income Tax Assessment Act 1997 to update the list of specifically-listed deductible gift recipients.

Human rights implications

4.23 This Schedule does not engage any of the applicable rights or freedoms.

Conclusion

4.24 This Schedule is compatible with human rights as it does not raise any human rights issues.