If your koha is an unconditional gift you do not have to pay GST on it. An unconditional gift is a voluntary payment to a non profit body that does not benefit the payer or giver in the form of goods or services.
If the koha, such as payments, goods or services are not an unconditional gift they will be liable for GST.
Deciding if your koha is liable for GST
Using the unconditional gift rule will let you know whether your koha is liable for GST. To help you decide, we’ve added some examples below. They’re based on a non profit marae registered for GST.
GST on marae member payments
When a marae member gives money, goods or a service (koha) to their marae and expects nothing in return, then it is not subject to GST or liable for income tax.
Types of payments not taxed are:
- money given to bereaved family or committee at a tangihanga or hura kōhatu
- money given to a married couple or committee at a mārena
- koha given to a marae committee to assist in paying for a building house or church
- visitors on a marae giving a collection to donate to the marae committee
Types of payments that must be taxed are:
- a government department giving payment on a marae
- tourists given a tour on a marae for a fee
- fund raising activities by marae committee
- a marae building is made available for a function in exchange for koha.
Queen City Carriers is a transport and logistics business that wants to expand its fleet of trucks in Auckland. They invest in 4 new trucks for $75,000 each, and expand their fenced parking lot to accommodate them - at a cost of $200,000 for new fencing.
In total, all the new trucks ($300,000) and the land improvements ($200,000) cost $500,000. Queen City Carriers can claim 20% of the total cost as a deduction in that year's tax return - that's $100,000.
Queen City Carriers can claim depreciation on the remaining 80% of the cost of the new assets ($400,000) as if that amount is 100% of the cost.
Queen City Carriers is a transport and logistics business that wants to expand its fleet of trucks in Auckland. They invest in 4 new trucks for $75,000 each, and expand their fenced parking lot to accommodate them - at a cost of $200,000 for new fencing.
In total, all the new trucks ($300,000) and the land improvements ($200,000) cost $500,000. Queen City Carriers can claim 20% of the total cost as a deduction in that year's tax return - that's $100,000.
Queen City Carriers can claim depreciation on the remaining 80% of the cost of the new assets ($400,000) as if that amount is 100% of the cost.
Queen City Carriers is a transport and logistics business that wants to expand its fleet of trucks in Auckland. They invest in 4 new trucks for $75,000 each, and expand their fenced parking lot to accommodate them - at a cost of $200,000 for new fencing.
In total, all the new trucks ($300,000) and the land improvements ($200,000) cost $500,000. Queen City Carriers can claim 20% of the total cost as a deduction in that year's tax return - that's $100,000.
Queen City Carriers can claim depreciation on the remaining 80% of the cost of the new assets ($400,000) as if that amount is 100% of the cost.