On 2 September 2021, the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021 (Bill) passed both Houses of Parliament – the Bill amends the Income Tax Assessment Act 1997 (Cth) (ITAA 97) for the following 11 DGR categories to require the relevant fund, authority or institution to be an Australian Government agency, a charity registered with the ACNC or to be operated by an Australian Government agency or a charity registered with the ACNC:

·       Health—public fund for hospitals

·       Health—public fund for public ambulance services

·       Education—public fund for religious instruction in government schools

·       Education—Roman Catholic public fund for religious instruction in government schools

·       Education—school building fund

·       Education—public fund for rural school hostel building

·       Research—approved research institute

·       Welfare and rights—public fund for persons in necessitous circumstances

·       Environment—public fund on the Register of Environmental Organisations

·       Cultural organisations—public fund on the Register of Cultural Organisations

·       Fire and emergency services—fire and emergency services fund

The Bill is awaiting Royal Assent, and the amendments to the ITAA 97 will come into effect on 1 October 2021 (and will not apply to DGRs until 1 January 2022) if the Bill is given Royal Assent before that date.

Existing DGRs that are not registered as charities with the ACNC have 12 months from 1 January 2022 (or up to 4 years from 1 January 2022, if granted an extended application date in writing by the Commissioner of Taxation) to comply with the new requirements in the ITAA 97 as introduced by the Bill. Accordingly, entities affected by the new requirements in the ITAA 97 as introduced by the Bill may need to consider their ongoing eligibility for DGR status once these changes come into effect – this may require having to apply to be registered as a charity with the ACNC (which may require amendments to the entity’s governing rules to ensure that the entity is entitled to be registered as a charity with the ACNC).

Please contact Jae Yang if you have any questions or would like to discuss your organisation’s continuing eligibility for DGR status subsequent to the Bill’s passage.