Hot topics for charities
In November 2018 the Queensland Office of State Revenue (OSR) made changes to its eligibility requirements for charities seeking to be registered to receive Queensland stamp duty, land tax and payroll tax concessions.
As part of these changes, charities seeking to be registered must be able to show the OSR that their governing documents expressly provide that:
Charities which were already registered with the OSR were given a transitional period to make these changes to their governing documents until 8 November 2020. With November fast approaching, there has never been a better time to conduct a review of your governing documents.
As part of good governance, we recommend that charities conduct regular reviews of their governing documents and charitable status to make sure that they are still fit for purpose and reflect the organisation’s charitable purposes, as well as comply with best practice modern drafting principles.
If your charity is currently registered with the OSR and requires an update or are looking to register in future, HopgoodGanim has extensive experience in reviewing and providing advice on all aspects of charities and not-for-profits – from structuring and establishment, registration with the Australian Charities and Not-for-profits Commission (ACNC) and the Australian Taxation Office (ATO), governance and compliance.
New legislation has been passed to amend the Corporations Act 2001 (Cth) to require all directors of Australian registered companies and registered Australian bodies (which will include charitable companies, such as public companies limited by guarantee, and incorporated associations who operate outside their state of registration) to have a unique director identification number (DIN).
The DIN is part of a suite of changes designed to modernise Australia’s corporate gatekeeping, which includes updating all registers into a single Commonwealth Business Register to be administered by the ATO. One of the objects of the changes is to assist with tracking directors who are involved in repeated illegal activity or are disqualified.
Originally, the legislation was expected to commence in 2021. However, due to recent challenges arising from COVID-19, it is likely that the new requirements will come into effect in 2022. Once the legislation comes into effect existing directors will have an 18-month period to apply for a DIN.
Victoria has recently made changes to its fundraising law allowing charities registered with the ACNC to conduct fundraising in Victoria without the requirement of applying for a fundraising licence. Instead, charities registered with the ACNC will only be required to notify Consumer Affairs Victoria of their intention to conduct fundraising activity.
Similar to Victoria, South Australia and the Australian Capital Territory operate streamlined frameworks for charities that are registered with the ACNC and undertake fundraising activities. After 1 July 2020, Western Australia now issues continuous licences that do not expire and ACNC registered charities are not required to submit annual statements or financial reports to WA Consumer Protection.
Although the above changes are welcome, there is still much work to do to adopt streamlined processes for ACNC charities wishing to fundraise in other states – particularly in New South Wales, Tasmania and Queensland.
The Commonwealth Treasury is currently seeking submissions on the draft bill and explanatory memorandum to require organisations seeking endorsement as a deductible gift recipient (DGR) to be registered as charities with the ACNC as a prerequisite to eligibility.
Currently the majority of the 52 general DGR categories require that the fund, authority or institution is registered with the ACNC. However, the amendments will extend this requirement to all categories.
The DGR categories subject to the amendments are as follows:
Organisations which already hold DGR status under the above categories will have 12 months from the date the amendments come into effect to register with the ACNC (unless granted a further extension from the Commissioner of Taxation (ATO)).
For organisations thinking about applying for DGR status under one of the above categories, we recommend that proactive steps are taken to register as a charity with the ACNC as part of your application process.
At the moment there does not appear to be any changes to the conditions which need to be satisfied, however this may change as a result of feedback received during the consultative stage and once the draft bill is introduced to Federal Parliament.