Potential reforms to DGR status for charities

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The not-for-profit sector is being called on to respond to a new discussion paper exploring potential reforms to the Deductible Gift Recipient (DGR) tax arrangements for charities.

The Tax Deductible Gift Recipient Reform Opportunities paper, published by the Treasury in late June 2017, examines the governance of DGRs and the complexity of DGR application processes.

DGR status allows an organisation to receive tax-deductible gifts and contributions. Donors are able to claim a tax deduction for gifts and contributions. The DGR tax arrangements are intended to encourage philanthropy and provide support for the NFP sector.

The paper recommends an increased role for the Australian Charities and Not-for-profits Commission (ACNC), whereby all DGRs could be required to be charities registered and regulated by the ACNC. The ACNC could revoke an organisation’s registration status, and consequently the ATO would revoke the organisation’s DGR status, if one of the grounds for revocation under the ACNC Act were to exist. Among many other recommendations.

According to the report, their aim is “to strengthen the DGR governance arrangements, reduce administrative complexity and ensure that an organisation’s eligibility for DGR status is up to date”.

Closing date for submissions is Friday, 4 August 2017.