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DGRs under review

Customers that have a Public Company Limited by Guarantee with Deductible Gift Recipient (DGR) status, or are wanting to obtain DGR status, may be affected by potential reforms raised by the government.

On 15 June 2017, the Commonwealth Treasury released its discussion paper, 'Tax Deductible Gift Recipient Reform Opportunities', which outlines potentially significant implications to the DGR tax arrangements if all the possible reforms are implemented.

Jessica Leppert, Maddocks Lawyers


DGR status allows an organisation to receive gifts and contributions for which donors are able to claim a tax deduction. The DGR tax arrangements are intended to encourage philanthropy and provide support for the not-for-profit (NFP) sector.[1]

Currently the process to obtain DGR status can take up to a year and is complex and tiresome:

  • entities can apply under 51 general categories (including under 4 different registers);
  • the 4 registers are administered by 4 different government departments; and
  • there are different application processes for organisations that are already registered as charities and those that are not.

The proposed amendments aim to address these issues.

Proposed amendments

Proposed amendments

What would this mean for DGRs?


Requiring all DGRs to be registered as charities and regulated by the Australian Charities and Not-for-profits Commission (except government entities)

Would need to:

  • lodge an Annual Information Statement;
  • lodge annual financial reports (if a medium or large charity);
  • adhere to ACNC governance standards or face revocation of registration (and DGR) status.


Transferring the administration of the 4 DGR registers to the ATO

  • Must first apply to the ACNC (rather than to the government agency which administers the relevant register);
  • Must nominate for endorsement one of the general DGR categories (including the 4 DGR registers);
  • Once approved by the ACNC, the ATO would then assess applications against the tax law to determine eligibility in respect of that DGR category;
  • The whole process could be completed within a month.


Removing the public fund requirement for DGRs that are charities

  • Organisations would not need to set up separate public funds if they apply for multiple endorsements.


Introducing a rolling program of regular review by the ACNC or the ATO, or both, of an organisation's DGR status

  • DGRs would no longer be able to exist in perpetuity;
  • They would be reviewed every 5 years by ACNC and ATO conducting an initial desk-top review, and further investigate any organisations identified as high risk;
  • Specifically-listed DGRs would face a sunset period of no more than 5 years, after which they would need to reapply for endorsement;
  • They would face revocation of the DGR status if the review found necessary grounds.


Requiring DGRs to certify annually that they meet DGR eligibility requirements

  • This would be completed as part of their Annual Information Statement;
  • There would be penalties for false statements.

Cleardocs packages and legal advice

Cleardocs will continue to monitor the progress of these potential reforms and work with our lawyers at Maddocks to ensure that customers purchasing the Company Limited by Guarantee product and who want to apply for DGR status are supported.

More information from Maddocks

For more information, contact Maddocks on (03) 9258 3555 and ask to speak to a member of the Commercial team.

More Cleardocs information on related topics

You can read earlier ClearLaw articles on a range of topics, such as:

Order related document packages

[1] Division 30 of the Income Tax Assessment Act 1997 (Cth) (Gifts and Contributions).


Lawyer in Profile

Paul Ellis
Paul Ellis
Special Counsel
+61 3 9258 3524

Qualifications: LLB, Deakin University, BA (Political Science), Monash University

Paul is a Special Counsel in Maddocks Government and Not-for-Profit Commercial team. He specialises in:

  • the establishment, governance, operations, regulation and administration of charities and other not-for-profit entities,
  • in commercial arrangements for the procurement or supply of goods and services, including technology services, and
  • in compliance and enforcement activities undertaken by government agencies.

Paul is Maddocks' main authority in relation to the Personal Property Securities Act 2009.

He has an in-depth understanding of the government sector, as his experience prior to Maddocks includes 13 years with the Victorian Department of Justice.

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