Charitable organisations: Guidelines for non-resident charities

Guidelines for non-resident charities

Introduction

These guidelines outline Inland Revenue's requirements for non-resident charities to apply for and obtain exemption from income tax. We may approve exemption from income tax for a non-resident charity if they are unable to be registered with the Charities Commission under the Charities Act 2005.

The Charities Commission will consider non-resident organisations for registration where the organisations:

• have a strong connection with New Zealand, and
• fulfil the required the criteria for registration as a charity.

Recent law change

Under a recent change to the Income Tax Act 2007, non-resident charities who cannot be registered by the Charities Commission because they:

• are not established in New Zealand, or
• do not have a strong connection with New Zealand

may apply to us to be exempt from income tax and gift duty as a tax charity. In making an application the non-resident charity must either:

• produce evidence of having been declined by the Charities Commission, or
• explain why they consider they won't be able to be registered with the Charities Commission.

Criteria for exemption

In considering applications from non-resident organisations for exemption as a tax charity that is unable to be registered under the Charities Act, we apply the following criteria:

• The organisation is not resident in New Zealand.
• The organisation is recognised as being charitable in its own home or domestic jurisdiction.
• The organisation's purposes are charitable under the tests for a charity, ie
  • for the relief of poverty,
  • for the advancement of education,
  • for the advancement of religion,
  • for any other matter beneficial to the community.

• The organisation provides a public benefit and does not apply its funds for private pecuniary profit.

We will determine whether a non-resident organisation meets the tests for charitable purpose. Find out more about what constitutes charitable purpose.

How to apply for an exemption

As well as satisfying the above criteria, the non-resident organisation will need to provide us with written evidence that it is recognised as a charity in its home jurisdiction. Examples of acceptable evidence would be:

• a notice of endorsement for charity tax concessions provided by the organisation's domestic revenue authority, or
• a letter from the domestic revenue authority confirming that the organisation is resident in that country and that it is exempt from income tax as a charity, or
• any other evidence of registration as a charity in its home jurisdiction.

Please send completed applications to:

Inland Revenue
PO Box 251
Timaru.

Date published: 06 Oct 2008

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