Deductible Gift Recipient (DGR) status allows an entity to receive tax deductible gifts and contributions from the public. Donors can claim an income tax deduction for donations of $2 or more to a DGR. This mechanism encourages philanthropy and provides support to the not-for-profit sector.
There are currently 52 categories of DGR set out in the gift provisions (Division 30) of the Income Tax Assessment Act 1997. Of these categories, 4 are currently administered by portfolio agencies. They are:
- Register of Cultural Organisations, administered by the Department of Infrastructure, Transport, Regional Development, Communications and the Arts
- Register of Environmental Organisations, administered by the Department of Climate Change, Energy, the Environment and Water
- Register of Harm Prevention Charities, administered by the Department of Social Services
- Overseas Aid Gift Deductibility Scheme, administered by the Department of Foreign Affairs and Trade.
The reform is intended to transfer administration of the 4 unique DGR categories from portfolio agencies to the Australian Tax Office (ATO).
The ATO would gain responsibility for assessing eligibility for the 4 unique DGR categories, consistent with the 48 other DGR general categories. The ATO would continue to be responsible for the endorsement of all 52 DGR categories.
This change is intended to make all DGR categories consistent in administration, reduce red tape imposed on endorsed organisations, and simplify the application process for organisations seeking DGR status.