From the Mid-Year Economic & Fiscal Outlook 2017-2018, “Appendix A: Policy decisions taken since the 2017-18 Budget”, two significant changes were announced which will impact Australian charities
Page 187 announces detail on funding for the ACNC related to Managing the risks of overseas Philanthropy:
The Government will provide $1.1 million for the Australian Charities and Not-for-profits Commission (ACNC) to issue external conduct standards under the Australian Charities and Not-for-profits Commission Act 2012 (ACNC Act). The standards will give the ACNC stronger oversight of charities’ overseas activities and finances, to address the risks of overseas philanthropy such as money laundering and terrorism financing. The Government will give certainty to not-for-profits by not proceeding with the unlegislated 2009-10 Budget measure titled Philanthropy — reforming the ‘in Australia’ requirements that apply to tax exempt entities.
Pages 110-111 of the same report discuss Deductible Gift Recipient Reform — strengthening governance and integrity and reducing complexity.
Notably, four separate registers will move to the ACNC:
- Register of Environmental Organisations
- Register of Harm Prevention Charities
- Register of Cultural Organisations
- Oversees Aid Gift Deduction Scheme
The Government will provide $5.7 million for the Australian Charities and Not-for-profits Commission (ACNC) and the Australian Taxation Office (ATO) to improve governance, reduce complexity and boost integrity of the deductible gift recipient (DGR) framework.
From 1 July 2019, non-government entities with DGR tax status will be automatically registered as charities with the ACNC, providing consistent oversight of DGRs by the national charity regulator. Transitional arrangements will minimise the registration burden and provide more time for DGRs to provide basic registration information. The Commissioner of Taxation will have the power to grant exemptions from this requirement in limited circumstances.
From 1 July 2019, the Register of Environmental Organisations, Register of Harm Prevention Charities, Register of Cultural Organisations and Overseas Aid Gift Deduction Scheme will be integrated with the ACNC Charity Register. The ACNC will assume all administrative responsibilities for those, harmonising applications and reporting in one central location.
From 1 July 2020, the ACNC and ATO will be funded to conduct additional reviews of DGRs’ eligibility, to ensure that tax concessions remain targeted to those entities that are entitled.
This measure is estimated to have an unquantifiable gain to revenue over the forward estimates period.
Page 111 provides detail on Extending DGR to organisations promoting Indigenous languages
The Government will expand access to deductible gift recipient status to organisations that operate to promote Indigenous languages, including through their revitalisation and maintenance. The measure recognises the value of Indigenous languages and addresses a current disparity in the tax treatment between Indigenous arts and Indigenous languages organisations.
This measure is estimated to have a negligible cost to revenue over the forward estimates period.