Canberra acts to simplify DGR

The legislative changes apply for organisations applying under four unique DGR registers currently administered by federal ministers through departmental registers:

• Environmental organisations

• Harm prevention charities

• Cultural organisations

• Overseas aid organisations

The four groups will now be added to the 48 DGR categories under which an organisation may be eligible for endorsement as a DGR currently administered by the Australian Taxation Office.

Assistant Minister for Charities Andrew Leigh said the changes were part of the Albanese government’s commitment to boosting philanthropy and supporting a vibrant charitable sector.

“The Australian Government has been identifying ways to make life easier for Australia’s registered charities,” Mr Leigh said.

“Charities should get tax deductibility status based on the quality of their work, and whether they match the requirements of the category, not depending on whether they match an individual Minister’s idea of public benefit.”

The reforms introduced under the Treasury Laws Amendment (Refining and Improving Our Tax System) Act 2023, will take effect from 1 January 2024.

Mr Leigh said the amendments will make all DGR categories consistent in administration, reducing the regulatory burden imposed on endorsed organisations by streamlining the application process and aligning reporting requirements with the other DGR categories.

In welcome news for charities, the change is also expected to reduce the time to obtain DGR status for organisations applying under the four DGR registers from up to two years to around one month.

The sensitivity around tax-deductible giving status was highlighted in the recently released 9^th edition of the Australian Charities report, with figures from the 2021 reporting period revealing just 41.5 per cent of charities had obtained DGR status from the ATO.

The report’s findings confirmed DGR-endorsed charities are more likely to receive donations.

The government stressed eligibility for DGR status is not intended to change because of the reforms.

The legislation contains transitional provisions to ensure that organisations currently endorsed as DGRs under these four registers will continue to be endorsed, so long as they continue to meet the existing eligibility criteria.

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