Digital Games Tax Offset

Closing date: 18 April 2022

Australian Treasury is seeking feedback and views from stakeholders on the legislation and explanatory memorandum that will introduce the new Digital Games Tax Offset (DGTO).

As part of the Digital Economy Strategy, the Government announced that it would introduce a DGTO to strengthen the digital games industry in Australia; expand employment opportunities for digital and creative talent; enhance the industry’s international competitiveness; and make Australia an attractive destination for foreign investment. The DGTO is a 30 per cent refundable tax offset for eligible business that spend a minimum of $500,000 on qualifying Australian development expenditure related to the development of eligible games from 1 July 2022.

The proposed new offset will be implemented through amendments to the Income Tax Assessment Act 1997 (ITAA97) through the creation of a new Division 378.

Further information available here.


Distribution guidelines for ancillary funds

Closing date: 6 May 2022

An ancillary fund is a trust set up and maintained solely for the purpose of providing money, property or benefits to deductible gift recipients (DGRs). Although an ancillary fund is also a DGR, it does not undertake charitable work. Instead, it acts as an intermediary between donors and DGRs that do undertake such work.

Ancillary funds encourage philanthropy by allowing donors to receive an upfront tax deduction for gifts that are distributed over time to other DGRs.

To ensure ancillary funds meet their philanthropic goal, guidelines made under the Taxation Administration Act 1953 require funds to (amongst other things):

  • make a minimum distribution each financial year to type 1 DGRs that undertake charitable work; and
  • restrict the transfer of assets between ancillary funds.

The consultation paper seeks feedback on proposals to provide greater flexibility to ancillary funds while preserving their philanthropic nature.

Further information available here.


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