From 14 December 2021, 11 categories of Deductible Gift Recipients (DGR) will need to register as a charity or be operated by a registered charity.
What does the new requirement involve?
From 14 December 2021, affected DGRs will need to register as a charity with the Australian Charities and Not-for-profits Commission (ACNC) or be operated by a registered charity.
What is a DGR?
A DGR is an entity or fund that has been endorsed by the Australian Taxation Office (ATO) as a tax deductible gift recipient.
What DGRs are affected?
The new requirements applies to the following non-government DGRs (the affected DGRs):
- public fund for hospitals;
- public fund for public ambulance services;
- public fund for religious instruction in government schools;
- Roman Catholic public fund for religious instruction in government schools;
- school building fund;
- public fund for rural school hostel building;
- approved research institute;
- public fund for persons in necessitous circumstances;
- fire and emergency services fund;
- public fund on the Register of Environmental Organisations (REO); and
- public fund on the Register of Cultural Organisations (ROCO).
Public and Private Ancillary Funds and entities listed by name in the Income Tax Assessment Act 1997 (Cth) will not be affected.
How does this affect me?
My affected DGR is already a registered charity
- If an affected DGR is already a registered charity, there is no need to do anything.
My affected DGR is operated by a registered charity.
- If an affected DGR fund is operated by a registered charity (for example, a school building fund that is operated by a school that is a registered charity), there is no need to do anything.
My affected DGR is not a registered charity and is not operated by a registered charity.
- If your DGR entity or fund is not a registered charity and is not operated by a registered charity, you must apply to be a registered charity. The following transition arrangements apply:
Existing DGRs listed on the ROCO or the REO as at 14 December 2021 and
any other affected DGR. | Your organisation has until 14 December 2022 to become a registered charity. The ACNC can take 6-8 weeks (occasionally longer) to consider an application for charity registration, so ensure you start the process with plenty of time to spare.
Your organisation can apply to the ATO for an extension of up to three years (to 14 December 2025). When considering your application, the ATO may consider matters including: whether an application was made before 14 December 2022 and is still pending; whether material changes have been made to your organisation’s purpose or activities which will affect ongoing entitlement to DGR endorsement; and whether your organisation has previously been refused charity registration by the ACNC (further details can be found here: DGR – Extended Application Date Instrument 2021). |
| Organisations that have applied to the REO or ROCO but whose application has not been approved before 14 December 2021. | Your organisation is ineligible for any transition period or extension. Your organisation can contact the relevant register about the status of your application:
REO: reo@awe.gov.au or (02) 6274 1467
ROCO: roco.mail@arts.gov.au or (02) 6271 7108
Your organisation should apply now for registration as a charity if it has not already done so. |
| Organisations that apply for DGR endorsement after 14 December 2021. | Your organisation must register as a charity before the ATO will consider DGR endorsement and before any application for listing on the ROCO or REO is progressed. |
What does becoming and remaining a registered charity involve?
To become a registered charity, your organisation must be able to demonstrate that it meets the requirements of being a not-for-profit and has a charitable purpose. You may find the ACNC registration checklist helpful.
To remain a registered charity, your organisation must notify the ACNC of key changes, maintain up-to-date financial and operational records, submit an annual information statement to the ACNC and comply with the ACNC Governance Standards and External Conduct Standards.
How can we help?
Moores can help if you:
- have any questions about the requirement to register as a charity;
- need help with registering as a charity; or
- need help understanding or complying with your obligations as a registered charity.
Please contact us if we can assist you.