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myIR, payments and more

Find out what income is liable for GST and income tax

Your organisation you may receive many different types of income, including:

  • subscriptions
  • grants
  • subsidies
  • donations or koha
  • fees
  • raffle money
  • trading profits, and
  • proceeds from selling assets.

Some grants made to non-profit organisations can be an unconditional gift or donation, especially if given by charitable trusts.

 If your income is liable for income tax and GST

Use the table below to find out what income is liable for:

  • income tax (for organisations not entitled to an exemption), and
  • GST (for those organisations that are registered for GST).
  Liable for income tax Not liable for income tax Liable for GST Not liable for GST Exempt from GST
Subscriptions   Yes Yes    
Donations   Yes   Yes  
Koha   Yes*   Yes  
Bequests   Yes   Yes  
Grants   Yes Yes    
Unconditional gifts   Yes   Yes  
Subsidies   Yes** Yes    
Suspensory loans Yes   Yes    
Trading activities Yes   Yes    
Raffles or housie proceeds   Yes** Yes    
Admission fees Yes   Yes    
Affiliation fees Yes   Yes    
Sale of donated goods or services   Yes     Yes
Sale of purchased goods Yes   Yes    
Sale of assets or equipment   Yes Yes    
Insurance receipts   Yes Yes**    
Hall or equipment hire Yes   Yes    
Rent received (residential) Yes       Yes
Rent received (commercial) Yes   Yes    
Penalty payments (fines) Yes   Yes    
Advertising or sponsorship Yes   Yes    
Interest or dividends Yes       Yes
Gaming machines Yes   Yes    

*  The tax treatment of koha depends on what it is. See our booklet Payments and gifts in the Mäori community (IR278).
** Liable in certain situations.

If your income is exempt from GST

If your income is "exempt from GST", it's different from income that's "not liable for GST". This is important when you're working out your claim for GST input tax credits on goods and services for your organisation.

Claiming input tax credits on expenses

If you're a GST-registered non-profit organisation you may claim input tax credits on expenses.

These tax credits can be claimed on expenses gained from income that's either:

  • liable for, or
  • not liable for GST.

Tax credits can't be claimed on expenses gained from income that's exempt from GST.

Example
If you're a GST registered non-profit organisation that receives income from... then you're...
a government grant liable for GST
trading activities liable for GST
donations not liable for GST
renting a residential property exempt from GST

As a non-profit organisation you may claim a GST input tax credit for all expenses, except those from receiving the rent, which is exempt from GST.