Income tax Dates
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FEB 9End-of-year income tax and Working for Families bills are due, unless your tax agent has an extension of time to file your income tax return.
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MAR 2AIM instalments are due if you have a March balance date.
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MAR 2Provisional tax payments are due if you have a March balance date and use the ratio option.
Koha can be money, goods or services. You need to work out if your business needs to pay income tax on koha on a case-by-case basis.
General rule for gifts or donations
You do not generally need to pay tax on koha if it is a genuine gift or donation.
This means:
- it’s given by choice
- the person giving or paying it gets no benefit in return
- it’s not intended to be income for you.
If koha, such as payments, goods or services, is given in exchange for something, it is not a gift. You may need to pay income tax and GST on this type of koha.
Type of business
Whether you need to pay income tax on koha also depends on how your organisation is registered. Some charities, not-for-profits or sports clubs may qualify for tax exemptions or deductions.
Charities
If you are registered as a charitable organisation with Charities Services, such as some marae and kōhanga reo, you are exempt from paying income tax.
Sporting groups
If you are registered as a sporting body, such as a waka ama group, you may be exempt from paying income tax. Some sporting bodies are not totally exempt from income tax, but do receive an income tax deduction, meaning that they do not need to pay income tax on the first $1,000 of taxable income they receive.
Other not-for-profit organisations
If your organisation is a not-for-profit, you can apply to receive an income tax deduction. This means that you do not need to pay income tax on the first $1,000 of taxable income you receive.
Running your not-for-profit or charity
Koha rules depend on how goods or services are given
If your organisation is exempt from paying income tax, you do not need to pay income tax on koha.
To work out when you need to pay income tax on koha, look at the situation in which it was given. Here are some examples to help you.
More examples specifically related to GST requirements are provided in our section on GST.
ABC Timber Limited is a Taupo-based business that cuts down trees and transports the logs to the Port of Napier for export.
The company has built a small “village” of temporary houses for forestry workers to stay in during the week.
Near the village, there are some impressive bush walks that are popular with tourists.
During weekends, when the workers have gone home, the company offers the houses to tourists for a set cost per person.
ABC Timber Limited is providing a service, and the payments received from tourists will be taxable income.
That’s because the payments are not voluntary and the payers expect a benefit in return.
Fiona is a sheep farmer in Queenstown. Her land is in a picturesque part of town, overlooking the lake.
One day, a woman contacts Fiona asking if she and her partner could come onto Fiona’s land to take wedding photos.
Fiona is delighted and refuses to charge the couple.
After a great photo shoot, the couple give Fiona a sum of money in appreciation.
The money is a gift and not taxable.
That’s because the payment was given voluntarily and not for any benefit or advantage.
An Auckland kōhanga reo charges fees for children to attend. 1 of the parents gives the kōhanga reo food and other goods instead of paying fees for their child.
The value of the food and goods is taxable income.
That’s because this koha is not given voluntarily and the giver gets something in return for it.
Another parent, who has paid the fees for their child, gives the kōhanga reo a gift of vegetables from their garden. Kōhanga reo staff make use of the vegetables to provide lunches to the children.
The vegetables are a gift and not taxable income.
That’s because the vegetables were given voluntarily, did not benefit the giver, and give no income to the kōhanga reo.
A Tauranga waka ama (canoeing) group owns outrigger canoes which it rents commercially to the public.
The rent is taxable income.
That’s because the rental payments are not voluntary and the payers receive a benefit in return.
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