Tax deductibility

Deductible Gift Recipient Reform and External Conduct Standards

Reforming administration of tax deductible gift recipients

In late 2017, the Federal Government announced major reforms to the administration and oversight of charities operating overseas and organisations with Deductible Gift Recipient (DGR) endorsement.

The revised start date for DGR reforms is now scheduled to commence on 1 July 2020. More information about the latest tax law and policy reforms is on the Australian Tax Office (ATO) website.

On 17 December 2018, the Government handed down the 2018-19 Mid-Year Economic and Fiscal Outlook (MYEFO), noting several proposed changes to tax and superannuation laws.

The DGR registers and Overseas Aid Gift Deduction Scheme will be integrated with the Australian Charities and Not-for-profits Commission (ACNC) charity register and duplicative reporting requirements will be abolished. The ACNC will also provide a central location for applications and reporting and will work with the ATO to provide a streamlined experience.

External Conduct Standards

As part of the package of reforms, the Government announced it would issue External Conduct Standards.  Charities' work overseas will be subject to new standards intended to provide a minimum level of assurance that charities meet appropriate standards of governance and behaviour when operating outside Australia.

The proposed standards cover:

  • Activities and control of resources (including funds)
  • Annual review of overseas activities and record keeping
  • Anti-fraud and anti-corruption
  • Protection of vulnerable individuals

On 26 November 2018, the proposed External Conduct Standards were tabled in Parliament. Unless they are disallowed, the External Conduct Standards are anticipated to come into effect on 1 July 2019.

The proposed standards will operate in addition to the existing ACNC Governance Standards.

Which charities will be affected by the External Conduct Standards

Charities that do not operate overseas will not be affected by the proposed standards.  It is proposed that the External Conduct Standards will apply to charities' overseas activities as well as their management of funds and aid sent overseas.

How a charity will comply with the proposed standards will vary according to its particular circumstances such as its size, its funding sources, its activities and the needs of the public.

What should charities operating overseas do now

Until the proposed standards come into effect, charities are not required to take any action. To maximise the time available for planning, however, charities may choose to review the proposed standards and consider them within the context of their own overseas activities.

Will this affect the OAGDS status my organisation currently holds

Organisations that hold OAGDS status are required to be registered with the ACNC, so will need to comply with the new External Conduct Standards.  Existing OAGDS status will not be affected by the transfer of the administration of OAGDS to the ACNC and the ATO.

Can I still apply for OAGDS

Organisations planning to lodge an application should note the OAGDS program is to be transferred to the ACNC and the ATO in the future.  Applications for OAGDS can be lodged until the transfer takes place. This website will be updated with information about transfer and transition arrangements as it becomes available.

Where to find more information

Visit the ACNC website for announcements as the proposed legislation progresses.

Overseas Aid Gift Deduction Scheme

The Overseas Aid Gift Deduction Scheme (OAGDS) enables Australian organisations to issue tax deductible receipts for donations to their overseas aid activities. These activities must be to support aid activities in countries that are declared as ‘developing’ by the Minister for Foreign Affairs. Members of the Australian community can then claim their donation as a tax deduction.

OAGDS is one part of the process for obtaining endorsement as a deductible gift recipient (DGR). The DGR process is managed by the Australian Taxation Office (ATO). For more information, visit the Australian Taxation Office website.

The OAGDS Eligibility Criteria contain conditions that organisations need to meet in order to be declared as an ‘approved organisation’ by the Minister for Foreign Affairs. The OAGDS Eligibility Criteria are available below.

Overseas Aid Gift Deduction Scheme - Eligibility Criteria [PDF 274 KB] | [DOCX 294 KB]

The OAGDS Guidelines assist organisations to understand the OAGDS Eligibility Criteria and application process, as well as the details and supporting evidence organisations can submit for each OAGDS Eligibility Criteria. The OAGDS Guidelines are available below.

Overseas Aid Gift Deduction Scheme - Guidelines [PDF 384 KB] | [DOCX 368 KB]

The OAGDS Frequently Asked Questions provide organisations with additional information on the process to be approved under the scheme. The OAGDS Frequently Asked Questions are available below.

Overseas Aid Gift Deduction Scheme - Frequently Asked Questions [PDF 293 KB] | [DOCX 272 KB]

All applications will be assessed under the OAGDS Eligibility Criteria and Guidelines. Please review these documents prior to commencing an application. The Eligibility Criteria include the following pre-eligibility requirements.

To be eligible to apply for OAGDS the organisation applying must:

  • have a voluntary governing body, and
  • be a registered charity with the Australian Charities and Not-for-profits Commission (ACNC) and conform to the ACNC Governance Standards.

The OAGDS application system is available online. Organisations are able to provide details and supporting evidence that address the OAGDS Eligibility Criteria in the Application Form after registering in the system. The Application Form and supporting documentation are used for assessment purposes. A preview of the OAGDS application form is available below without registering in the system.

Preview of OAGDS Application Form [PDF 244 KB]

The OAGDS online application system can be accessed through the link below:

OAGDS online application system

Contact information

Should you require assistance or have any questions, please contact us by logging into the online application system and submitting an enquiry through the link below or by email to the address below. If you would like to speak with a member of the OAGDS administration team please indicate this in your email.

Email: oagds@dfat.gov.au

Online application system: OAGDS online application system enquiry

Last Updated: 15 February 2019