EXPLANATORY STATEMENT

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

Taxation Administration Act 1953

Taxation Administration (Community Charity Trusts and Corporations) Amendment (2025 Measures No. 1) Declaration 2025

The Taxation Administration Act 1953 (the Act) contains the administrative framework for the taxation and superannuation law in Australia.

Taxpayers who make gifts to deductible gift recipients may claim tax deductions for those gifts, subject to any conditions applying to the deductible gift recipient or the gift. If an entity comes within one of the categories in Subdivision 30-B of the Income Tax Assessment Act 1997 (the ITAA 1997), the entity may apply to the Commissioner of Taxation for endorsement as a deductible gift recipient. Alternatively, an entity may acquire that status by being specifically listed in that Subdivision.

Prior to amendments made by Schedule 3 to the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Act 2024 (the amending Act), community charity trusts and community charity corporations did not fit neatly into any of the deductible gift recipient categories.

Schedule 3 to the amending Act created a framework for deductible gift recipient endorsement for community charities by creating a new class of entities that may apply for endorsement by the Commissioner of Taxation (the Commissioner) under Division 426 in Schedule 1 to the Act. The class consists of community charity trusts and community charity corporations. These two kinds of community charities are specified in two new items in Division 30 of the ITAA 1997 and defined in Division 426 in Schedule 1 to the Act. Individual community charity trusts and community charity corporations need to be specified by name in a Ministerial declaration made under that Division.

The purpose of the Taxation Administration (Community Charity Trusts and Corporations) Amendment (2025 Measures No. 1) Declaration 2025 (the Declaration) is to amend the Taxation Administration (Community Charity Trusts and Corporations) Declaration 2025 to specify another individual community charity trust for the purposes of Division 426 in Schedule 1 to the Act. The entity specified must meet the other requirements for deductible gift recipient endorsement under the Act, including being registered as a charity by the Australian Charities and Not-for-profit Commission, and complying with the Taxation Administration (Community Charity) Guidelines 2025.

There are no conditions that need to be satisfied before the power to make the Declaration can be exercised.

Public consultation was not undertaken on the instrument as the instrument is of a minor and machinery nature. The instrument relates to only a small number of entities and forms part of a broader process relating to obtaining deductible gift recipient status. Consultation was undertaken with the Australian Taxation Office (ATO), as the relevant regulator.

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

The Declaration is subject to disallowance and sunsetting.

Details of the Declaration are set out in Attachment A.

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

The Office of Impact Analysis advised that a Detailed Impact Analysis is not required in relation to this instrument (OIA25-10701).

ATTACHMENT A

Details of the Taxation Administration (Community Charity Trusts and Corporations) Declaration 2025

Section 1 – Name

This section provides that the name of the instrument is the Taxation Administration (Community Charity Trusts and Corporations) Amendment (2025 Measures No. 1) Declaration 2025 2025 (the Declaration).

Section 2 – Commencement

This section provides that the Declaration commences immediately after it is registered on the Federal Register of Legislation.

Section 3 – Authority

This section provides that the Declaration is made under the Taxation Administration Act 1953 (the Act).

Sections 4 – Schedules

Section 4 provides that each instrument that is specified in a Schedule to the Declaration is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.

Schedule 1 – Specified community charity trusts

Schedule 1 amends section 6 of the Taxation Administration (Community Charity Trusts and Corporations) Declaration 2025 to specify another trust that is community charity trust for the purposes of Division 426 in Schedule 1 to the Act.

ATTACHMENT B

Statement of Compatibility with Human Rights

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

Taxation Administration (Community Charity Trusts and Corporations) Amendment (2025 Measures No. 1) Declaration 2025

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 Taxation Administration Act 1953 (the Act) contains the administrative framework for the taxation and superannuation law in Australia.

Taxpayers who make gifts to deductible gift recipients may claim tax deductions for those gifts, subject to any conditions applying to the deductible gift recipient or the gift. Entities may apply to the Commissioner of Taxation for endorsement as a deductible gift recipient.

The Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Act 2024 added a new class of entities that may apply for endorsement, being community charity trusts and community charity corporations, and provided for individual community charity trusts and community charity corporations to be specified by name in a Ministerial declaration.

The Taxation Administration (Community Charity Trusts and Corporations) Amendment (2025 Measures No. 1) Declaration 20252025 amends the Taxation Administration (Community Charity Trusts and Corporations) Declaration 2025 to specify another individual community charity trust for the purposes of Division 426 in Schedule 1 to the Act.

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.