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I make monthly donations to various open source projects via Open Collective which is a 501(c)(6) organisation.

I live, work and pay tax in Australia.

Are these donations tax deductible in Australia?

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  • DW, the "501(c)(6) organisation" designation is a purely USA thing. Almost certainly, surely, the only issue at hand would be whether the Aussie authorities consider that organization a charity?? (Just in passing, I do find it absolutely bizarre that the US authorities, or any authorities, consider that organization a charity - I just can't see any connection in any way between software and charitable works, but, more luck to them if they'vce pulled that off!) – Fattie Jul 1 '20 at 9:16
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According to the Australian Taxation Office,

Organisations entitled to receive tax deductible gifts are called 'deductible gift recipients' (DGRs). You can only claim a tax deduction for gifts or donations to organisations that have DGR status.

On the same page, they provide a link at which you can check the DGR status of the organisation of interest:

You can check the DGR status of an organisation at ABN Look-up: Deductible gift recipients.

However, if the organisation isn't even registered in Australia, it would be unlikely to have DGR status (emphasis in original):

The ‘in Australia’ condition requires all DGRs to be in Australia. This means that all DGRs must be established and operated in Australia.

There are other conditions, but DGR status is an endorsement, so it would be possible for you to find out from the organisation directly and definitively whether they have that endorsement.

Aside from the rules about the organisation itself, there are also rules governing the claiming of the deductions. From one of the sub-links on the linked page:

When you give a gift or make a contribution to a NFP that is a deductible gift recipient (DGR) you may be able to claim a tax deduction. The amount you can claim will depend on the type of gift or contribution you make.

So for your donation to be tax deductible, the beneficiary organisation needs to have DGR status in Australia, and the donation itself needs to satisfy the prescribed rules.

Disclaimer: I am not a financial advisor and the above is not financial advice. Please consult relevant professionals before acting on any of the information provided.

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I can't comment on Australia tax law but I can answer that in the United States a 501(c)(6) corporation isn't a charity.

501(c)(6) organizations are a type of non-profit. That means that they don't have to pay income tax. That doesn't mean that people that donate money or stuff to them can claim the charitable deduction. Charities are 501(c)(3) non-profit organizations.

According to the IRS:

Section 501(c)(6) of the Internal Revenue Code provides for the exemption of business leagues, chambers of commerce, real estate boards, boards of trade and professional football leagues, which are not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual.

On the other hand regarding charitable organizations:

Organizations described in section 501(c)(3) are commonly referred to as charitable organizations. Organizations described in section 501(c)(3), other than testing for public safety organizations, are eligible to receive tax-deductible contributions in accordance with Code section 170.

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