Income Tax Assessment (Developing Country Relief Funds) Amendment (Update No. 1) Declaration 2022

Administered by Department of the Treasury

Legislation au F2022L01587 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Issued by authority of the Assistant Minister for Competition, Charities and Treasury

Income Tax Assessment Act 1997

Income Tax Assessment (Developing Country Relief Funds) Amendment
(Update No. 1) Declaration 2022

Subsection 30-85(2) of the Income Tax Assessment Act 1997 (the Act) provides that the Minister may, by legislative instrument, declare a public fund to be a developing country relief fund if the Minister is satisfied the relevant conditions set out in the Act have been met in relation to the fund.

The purpose of the Income Tax Assessment (Developing Country Relief Funds) Amendment (Update No. 1) Declaration 2022 (the instrument) is to declare three new public funds to be developing country relief funds.

By way of background, the income tax law allows income tax deductions for taxpayers who make gifts of $2 or more to a deductible gift recipient. Deductible gift recipients are entities that fall within one of the general categories set out in Division 30 of the Act or are specifically listed by name in that Division. Deductible gift recipient status helps eligible organisations attract public financial support for their activities.

The Overseas Aid Gift Deduction Scheme (OAGDS) is one of the general categories set out in Division 30 of the Act. Australian organisations approved under the OAGDS establish a public fund that is then declared by the Minister as a developing country relief fund. The fund is entitled to received tax deductible gifts.

Before the Minister declares a public fund to be a developing country relief fund, the Minister must be satisfied that the fund has been established by an organisation declared by the Minister for Foreign Affairs to be an approved organisation, and the fund is solely for the relief of people in a developing country (as included in the list of official development assistance recipients published by the Organisation for Economic Co‑operation and Development’s Development Assistance Committee or as declared the Minister for Foreign Affairs).

The Minister having been satisfied of the matters set out in the Act, the instrument declares three new public funds to be developing country relief funds. Details of the newly declared funds are set out at Attachment A.

Consultation on the instrument was undertaken with the Australian Taxation Office and the Department of Foreign Affairs and Trade. Public consultation was not undertaken on the instrument as it minor and machinery in nature. Entities seeking access to deductible gift recipient status under the OAGDS are subject to an application process, details of which are available at www.dfat.gov.au/aid/who-we-work-with/ngos/Pages/tax-deductibility.

Details of the instrument are set out in Attachment A.

The instrument is a legislative instrument for the purposes of the Legislation Act 2003.

The instrument commenced on the day after the day the instrument was registered on the Federal Register of Legislation.

A statement of Compatibility with Human Rights is at Attachment B.

ATTACHMENT A

Details of the Income Tax Assessment (Developing Country Relief Funds) Amendment (Update No. 1) Declaration 2022

Section 1 – Name of the instrument

This section provides that the name of the instrument is the Income Tax Assessment (Developing Country Relief Funds) Amendment (Update No. 1) Declaration 2022 (the instrument).

Section 2 – Commencement

The instrument commenced on the day after the instrument was registered on the Federal Register of Legislation.

Section 3 – Authority

The instrument is made under the Income Tax Assessment Act 1997 (the Act).

Section 4 – Amendment

This section provides that each instrument that is specified in a Schedule to the instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to the instrument has effect according to its terms.

Schedule 1 – Amendments to Income Tax Assessment (Developing Country Relief Funds) Declaration 2021

The item in this Schedule inserts three new rows into the table in section 5 of the Income Tax Assessment (Developing Country Relief Funds) Declaration 2021, with the effect of declaring the newly listed public funds as developing country relief funds.  The names of declared public funds are inserted into the table alongside the name of the operator of the public fund and the Australian Business Number of the operator.

Newly declared funds

A Liquid Future Ltd Gift Fund operated by the approved organisation and registered charity ‘A Liquid Future Ltd’ has been declared a developing country relief fund. A Liquid Future Ltd provides educational courses to young people across twelve villages in the Mentawai Islands and Morotai Island in Indonesia (a developing country). Further details can be found at https://aliquidfuture.org/.

The ICDP Foundation Fund operated by the approved organisation and registered charity ‘The Trustee for The ICDP Foundation’ (ICDP) has been declared a developing country relief fund.  ICDP was established to promote economic development in developing Pacific countries (Fiji, Papua New Guinea, Samoa, Solomon Islands, Tonga, and Vanuatu). Further details can be found at https://www.icdp.com.au/icdp-foundation/.

Mphatso Children’s Foundation Gift Fund operated by the approved organisation and registered charity ‘Mphatso Children’s Foundation Incorporated’ (MCFI) has been declared a developing country relief fund.  MCFI was established to promote education in the Nkhata Bay region of Malawi (a developing country). Further details can be found at https://www.mphatso.org/.

ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Income Tax Assessment (Developing Country Relief Funds) Amendment (Update No. 1) Declaration 2022

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The purpose of the Income Tax Assessment (Developing Country Relief Funds) Amendment (Update No. 1) Declaration 2022 (the instrument) is to declare three new public funds to be developing country relief funds.

The income tax law allows income tax deductions for taxpayers who make gifts of $2 or more to a deductible gift recipient. Deductible gift recipients are entities that fall within one of the general categories set out in Division 30 of the Act or are specifically listed by name in that Division. Deductible gift recipient status helps eligible organisations attract public financial support for their activities.

The Overseas Aid Gift Deduction Scheme (OAGDS) is one of the general categories set out in Division 30 of the Act. Australian organisations approved under the OAGDS establish a public fund that is then declared by the Minister as a developing country relief fund. The fund is entitled to received tax deductible gifts.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

Overview

The Income Tax Assessment (Developing Country Relief Funds) Amendment (Update No. 1) Declaration 2022 was enacted to address the need for declaring new public funds as developing country relief funds, thereby allowing these funds to receive tax-deductible donations. This instrument is a legislative measure under the Income Tax Assessment Act 1997, enacted by the Minister for Revenue and Financial Services, with the policy objective of facilitating tax deductions for donations made to specified funds dedicated to relief efforts in developing countries. By declaring these funds as developing country relief funds, the legislation aims to support charitable activities in developing nations and ensure that donations to these causes are eligible for tax deductions. The enactment of this declaration was informed by consultations with relevant government departments, including the Australian Taxation Office and the Department of Foreign Affairs and Trade.

Scope and Application

The Income Tax Assessment (Developing Country Relief Funds) Amendment (Update No. 1) Declaration 2022 applies to three new public funds declared as developing country relief funds under the Income Tax Assessment Act 1997. These funds are established by Australian organisations approved under the Overseas Aid Gift Deduction Scheme, which are solely for the relief of people in developing countries. The instrument declares these funds to be eligible for tax deductible gifts, thus enabling them to attract public financial support. The Act applies to the Commonwealth jurisdiction of Australia and extends its application through subordinate instruments to the specified public funds. No exclusions, exemptions, or thresholds are noted in the Act; however, entities seeking access to deductible gift recipient status under the OAGDS must go through an application process. The instrument commenced on the day after it was registered on the Federal Register of Legislation. The instrument is compatible with human rights, as it does not engage any of the applicable rights or freedoms.

Key Provisions

The Income Tax Assessment (Developing Country Relief Funds) Amendment (Update No. 1) Declaration 2022, referred to as the instrument, primarily involves the declaration of three new public funds as developing country relief funds under subsection 30-85(2) of the Income Tax Assessment Act 1997 (the Act) (Section 1). This amendment took effect the day after the instrument was registered on the Federal Register of Legislation (Section 2). The instrument is authorised by the Act and involves amendments to the Income Tax Assessment (Developing Country Relief Funds) Declaration 2021 as detailed in Schedule 1 (Section 3 and Schedule 1). The instrument specifies the addition of three new public funds to the list of developing country relief funds, each operated by approved organisations and registered charities (Schedule 1). The Act imposes specific obligations on entities aiming to qualify as deductible gift recipients. These entities must ensure that they are either within one of the general categories set out in Division 30 of the Act or are specifically listed by name in that Division (subsection 30-85(2)). For a public fund to be declared as a developing country relief fund, the Minister must be satisfied that the fund has been established by an organisation approved by the Minister for Foreign Affairs and that the fund is exclusively intended for the relief of people in a developing country, as defined by the Organisation for Economic Co‑operation and Development’s Development Assistance Committee or declared by the Minister for Foreign Affairs (subsection 30-85(2)). This process includes an application procedure managed by the Department of Foreign Affairs and Trade, with further details available on their website (www.dfat.gov.au/aid/who-we-work-with/ngos/Pages/tax-deductibility). Breach of the conditions set out in the Act could result in significant consequences for the entities involved. Although the specific offences, penalties, or civil/criminal consequences for breach are not detailed in the explanatory statement, it is clear that failure to meet the criteria for declaring a public fund as a developing country relief fund could invalidate the fund's status as a deductible gift recipient. This, in turn, would impact the fund's ability to receive tax-deductible donations, potentially affecting the financial support available for its activities. The instrument is designed to ensure compliance with these standards to maintain the integrity of the tax system and the charitable sector.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.