Daniela Chiew, Catherine Dean and Sally Whenman examine Treasury's proposals to strengthen governance arrangements relating to deductible gift recipients.
On 15 June 2017, Treasury released a Discussion Paper which considers potential reforms to the tax arrangements for entities that are currently registered or are seeking registration as a Deductible Gift Recipient (DGR).
The Discussion Paper proposes measures to further strengthen governance arrangements applying to DGRs, reduce administrative complexity and ensure that an organisations’ eligibility for DGR status is up to date. With approximately 28,000 registered DGRs in Australia in 2017, these measures have wide application.
The proposed reforms do not alter the current eligibility criteria to be a registered DGR, which include being a not-for-profit organisation, having an Australian Business Number, complying with the governance standards set by the Australian Charities and Not-for-Profits Commission (ACNC), not having a disqualifying purpose and not being an individual, political party or government entity.
Specifically, the following measures are proposed:
Treasury has invited submissions on the discussion paper which are due by 14 July 2017. In light of these proposed reforms as well as ensuring compliance with their current obligations, charities registered as DGRs should review their governance arrangements as a priority.
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