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myIR, payments and more

Non-profit organisations
Ngā rōpū moni kore hua

News and updates

On this webpage you will find information to help keep you up-to-date with new tax matters that could affect your non-profit charity, club, society or association.

Issues paper about GST on assets sold by non-profit bodies released

(published 17 May 2018)

An issues paper, GST on assets sold by non-profit bodies released on 15 May 2018, sets out proposals to clarify the GST rules for the sale of assets by charities and other non-profit bodies.

The main proposal is to ensure that GST is paid on the sale of assets where input tax deductions have been claimed. This applies to insurance receipts and de-registrations, as well as asset sales. The proposed changes will apply from 15 May 2018, with a savings provision to preserve tax positions taken before this.

Submissions on the issues paper close on 15 June.

Go to the issues paper GST on assets sold by non-profit bodies

Reimbursing volunteers for petrol

(published 10 October 2017)

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Not-for-profits can reimburse volunteers for petrol. The reimbursement payments are tax exempt for volunteers. From the 2016-2017 year, different rates apply for petrol/diesel, hybrid and electric vehicles.

Find out more about mileage rates

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Simplifying tax - claiming donation tax credits

(published 1 August 2017)

The government discussion document "Making tax simpler: Better administration of Individuals' income tax" was released on 19 June 2017 with a closing date for submissions on 28 July 2017.

Go to Making Tax Simpler: Better Administration of Individuals' income tax
PDF | 328kb | 47 pages

The Government sought feedback on whether donations tax credits should be partially reincorporated into the income tax process. Government also proposes that individuals can either:

  • fill in a separate Tax credit claim form (IR526), or
  • scan or photograph, and upload copies of their receipts directly into myIR Secure Online Services either during the year or at the end of the year. This information would then be available for determining an individual's tax position.

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The interpretation of "wholly or mainly" for the purposes of the donee organisation test

(published 20 October 2017)

We are consulting on our new draft item on the meaning of “wholly or mainly” for the purposes of the donee organisation test in s LD 3(2)(a). Consultation closes on 30 November 2017.

Find out more about the draft item and the accompanying fact sheet

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The meaning of "gift" for state and integrated schools

(published 1 August 2017)

We have started working on the meaning of "gift" for state and integrated schools. This item will build on QB 16/05: Income tax - donee organisations and gifts published in 2016. We plan to consult with the sector.

You can receive email notifications when draft public items are available for comment. Contact Public Consultation to be placed on a distribution list.

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Proposed changes to the tax rules when a charity deregisters

(published 1 August 2017)

The Taxation (Annual Rates for 2017-18, Employment and Investment Income, and Remedial Matters) Bill, introduced in April 2017, contains proposed changes to the tax rules when a charity deregisters. The proposed changes will extend the existing deregistration tax rules to all entities that derive exempt income under section CW 42 of the Income Tax Act (previously the rules just applied to registered charities). The proposed changes will also clarify that there will be no tax liability if assets are disposed of or transferred to another person for charitable purposes or in accordance with the entity's rules within 1 year of the deregistration.

You can find out more about the bill's progress on our Tax Policy website.

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Changes when volunteers are paid honoraria

(published 1 August 2017)

Many not-for-profits make payments to their volunteers. Those payments may be to reimburse volunteers for costs incurred while volunteering, or as payment for services that is at less than the market rate. A reimbursement payment is generally exempt from income tax, whereas a payment for services that is at less than the market rate is generally honoraria and subject to withholding tax.

Find out more about employer responsibilities

Find out about the different tax treatment between reimbursements and honoraria

Up to 31 March 2017 the rate of withholding tax on honoraria payments was 33%.

From 1 April 2017 volunteers can elect their own withholding rate by using our new form Tax rate notification for contractors (IR330C). The minimum rate they can elect is now 10%. Volunteers will still be required to file an IR3 income tax return.

Find out more about the change to withholding tax rates

Changes for not-for-profits that are financial institutions and have foreign account holders

(published 3 August 2017)

From 1 July 2017, new due diligence and reporting obligations apply to New Zealand financial institutions, including some not-for-profit organisations (NFPs).

If you are a NFP you may be impacted by the Common Reporting Standard (CRS).  The CRS is the single global standard for the collection, reporting and exchange of financial account information on foreign tax residents on an annual basis. The CRS has similarities to reporting requirements under the US Foreign Account Tax Compliance Act (FATCA). However not-for-profits are generally exempt from FATCA whereas they are not exempt from the CRS.

The CRS requires financial institutions to collect and report financial account information on foreign tax residents (Reportable Accounts). Under the CRS some NFPs will be financial institutions and may have obligations to report to us. NFPs could be financial institutions by either having managed investments or by conducting an investment business.

Even if your NFP is not a financial institution it may be asked by other entities for self-certification. Self-certification will require a financial institution to ask all new (and some existing) financial account holders a series of questions about their residence and entity status for tax purposes. Where a self-certification shows that an account holder is from a foreign jurisdiction, the financial account will have to be reported to us.

You can find a flowchart "CRS - Is the Trust a reporting NZFI" to help you understand whether you are a financial institution on our Important AEOI and CRS documents page.

Find out more about the Common Reporting Standard