Te tāke moni whiwhi me te tāke hokohoko mō ngā whakahaere kore moni hua Income tax and GST for not-for-profits

Not-for-profit organisations' income is treated differently depending on what kind of income it is.

Common not-for-profit income types include:

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

Some grants made to not-for-profits can be an unconditional gift or donation, especially if given by charitable trusts.

Income tax on grants and subsidies 

Donations (koha)

Income liable for GST and income tax

The table below shows whether:

• you'll have to pay income tax on different types of income, if you do not have an exemption from income tax
• you'll need to charge GST on income, if your not-for-profit is GST-registered.

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 not-for-profit organisation.

Claiming input tax credits on expenses

If you're a GST-registered not-for-profit you may claim input tax credits on expenses (credits for the GST you've spent on goods and services).

These tax credits can be claimed on expenses gained from income that's either liable or not liable for GST.

You cannot claim expenses gained from income that's exempt from GST, for example renting a residential property (see the table above).