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Are donations to your landcare group tax deductible?
Most people have seen the words 'Donations of $2 or more are tax deductible' on a receipt when donating to a charity. But did you know that it may be possible to obtain this same tax deduction for your landcare group (or a group with similar aims and objectives) so that all money and goods donated to the group can be deducted from the donor's taxable income?
Landcare groups are non-profit organisations usually established to enhance or protect the natural environment or to promote ecologically sustainable development. If you are part of a non-profit organisation with such aims, your group may be eligible to apply for registration as an 'Environmental Organisation'. This will allow all donors to your organisation to deduct their donations on their tax return, which would make your organisation far more attractive to donors, either individuals, companies, trusts or other types of taxpayers. This applies to donations of cash, trading stock or property.
Several landcare groups have already successfully applied and many more may be eligible. In order to qualify as a group with tax deductible status, there are certain steps your organisation needs to follow.
Eligibility
To be able to receive tax deductible gifts, an organisation must register as a DGR. To qualify as a DGR, an organisation must either be listed by name (as is Landcare Australia Ltd) in the income tax law, or fall within one of the 13 categories set out in the law. The most likely category a landcare group would fall into would be 'Environment'. Information about this may been found in an fact sheet on the ATO website.
To satisfy the requirements of a DGR under the Environment heading, an organisation must be 'a public fund that is on the Register of Environmental Organisations kept by the Department of the Environment, Water, Heritage and the Arts'.
How to apply to become a DGR?
Applications are made on an application form provided by the DEWHA.
When DEWHA has assessed whether the organisation and its public fund meet all the requirements of the legislation, the application is placed on a list of applicants awaiting approval. A document is then prepared presenting the applications for the assessment and approval of the Environment Minister and the (Assistant) Treasurer. Once the Environment Minister has agreed to the entries, he certifies that the organisations are environmental organisations to the (Assistant) Treasurer for approval. Donations to the public fund will then be tax deductible from the date of the Treasurer's signature on the instrument of approval.
For gifts to be allowable income tax deductions after 1 July 2000, all organisations who presently have DGR status, excluding those named in the income tax law, must also apply for and receive endorsement by the ATO. For landcare groups, this would be in addition to listing by DEWHA on the Register of Environmental Organisations. Before your organisation can be endorsed, you will also need to obtain an ABN from the ATO.
Organisations which are not yet DGRs need to apply to DEWHA for listing on the Register and to the ATO for endorsement. They also need to have an ABN before they can be registered.
Responsibilities of DGR organisations
An organisation on the Register of DGRs is required to provide DEWHA with annual statistical returns of tax deductible donations to its public fund. DEWHA also needs to be informed of changes to the rules of the public fund and to the membership of the management committee of the fund.
Further information
For more information on applying for DGR status, you can contact DEWHA on 02 6274 1467, email reo@environment.gov.au or look at the DEWHA website
Or you can contact the ATO on 132 478 or look at the ATO website - Environmental organisations and tax deductible gifts.