Senate

Revised Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Scott Morrison MP)

Chapter 6 - Deductible Gift Recipients

Outline of chapter

6.1 Schedule 5 to this Bill amends the ITAA 1997 to list Melbourne Korean War Memorial Committee Incorporated as a DGR.

Context of amendments

Deductible gift recipient status

6.2 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.

6.3 DGR status helps eligible organisations attract public financial support for their activities.

Melbourne Korean War Memorial Committee Incorporated

6.4 Melbourne Korean War Memorial Committee Incorporated is a registered charity created to establish a war memorial in Melbourne to honour the service and sacrifices of the Australians who served in the Korean War between 1950 and 1953.

Summary of new law

6.5 The amendment lists Melbourne Korean War Memorial Committee Incorporated as a DGR under the income tax law.

Detailed explanation of new law

Melbourne Korean War Memorial Committee Incorporated

6.6 Taxpayers may claim an income tax deduction for gifts made to Melbourne Korean War Memorial Committee Incorporated provided the gift complies with the existing requirements of the income tax law. [Schedule 5, item 1, table item 5.2.34 in subsection 30-50(2) of the ITAA 1997]

6.7 This amendment ensures that Melbourne Korean War Memorial Committee Incorporated receives appropriate support through the Commonwealth tax system for building a memorial in Melbourne honouring Australians who served in the Korean War.

Consequential amendments

6.8 Schedule 5 also amends the index for Division 30 of the ITAA 1997 to reflect the new listing. [Schedule 5, item 2, table item 72AAA in section 30-315 of the ITAA 1997]

Application and transitional provisions

6.9 The amendment applies to gifts made to Melbourne Korean War Memorial Committee Incorporated between 1 January 2018 and 31 December 2019 inclusive. [Schedule 5, item 1, third column of table item 5.2.34 in subsection 30-50(2)of the ITAA 1997]

6.10 The amendment applies retrospectively but after its announcement on 18 December 2017. This ensure that gifts made to Melbourne Korean War Memorial Committee Incorporated from 1 January 2018 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 Melbourne Korean War Memorial Committee Incorporated and also to the DGR.

6.11 The amendment commences on the first day of the first quarterly period following Royal Assent. [Clause 2]