Not For profits and the DGR Changes (Deductible Gift Recipient )
The Commonwealth Government has announced a number of potential changes to the Deductible Gift Recipient (DGR) system.
Under the old legislation, some DGRs had to report to the Commissioner of Taxation while others to ACNC.As released earlier this year, the reforms aim at bringing all non-government DGRs as well as charities under ACNC starting the 1th of July 2019 with a transitional period of 12-month to assist current non-charity DGRs with compliance.
The move also includes the integration of the existing Overseas Aid Gift Deduction Scheme and DGR registers with the ACNC Charity Register and therefore the requirements of duplicated reporting will be eliminated.
The Government has also issued a number of reforms aiming at strengthening the oversight of overseas activities in relation to money laundering and terrorism financing. The External Conduct Standards will be implemented by ACNC and is based on the recommendations in Money Laundering and Terrorism Financing Risk Assessment report.
Similarly, in an effort to improve transparency, ACNC will be also publishing the charities disclosures of political spending and the criminal activities of its members or staff in the Annual Information Statement.
Although some of the reforms were welcomed, others caused concern among advocates. Considerably, the Government has given assurance that some of the reforms will not be pursued. The environmental charities have welcomed the decision of not pursuing the implementation of a mandate percentage of their resources to be spent on remediation activities. Advocates and charities are also relieved that the “In Australia” legislation, which could restrict many DGRs from participating in legitimate activities outside Australia, will not be reintroduced to the list of new requirements.
While the list of reforms included some positive and negative changes, the moves have been welcomed by many as they aim at reducing complex governance, overseas related criminal activities and ensure that stakeholders can rely on the entity to operate in an ethical and responsible manner.
Nevertheless, the Government has stated that it will keep charities informed on the details of the changes once more information becomes available.
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