Income tax and resident withholding tax (RWT) exemptions give tax benefits to charities or organisations carrying on a business for a charity's benefit.
Donee status gives tax benefits to people, companies and Māori authorities who make donations to your charity.
You need to register your charity with Charities Services. Your charity must meet the 2 main conditions.
- The charity's purpose and activities must be exclusively charitable.
- None of the charity's income or funds may be used, or be available for use, to benefit any of its members, trustees or associates.
If your charity is a non-resident of New Zealand and unable to register as a charity with Charities Services, you may be able to apply to us for approval.
If you're carrying on a business for a charity
From the 2020 -2021 year, any person or organisation that is carrying on a business for the benefit of a charity must be registered with Charities Services to get or keep a business income tax exemption.
The charitable exemption is only for business income used for charitable purposes in New Zealand. Business income used for charitable purposes overseas is taxable.
Responsibilities for charities with an income tax exemption
If your charity is fully exempt from income tax, you will not need to file an income tax return unless we ask you to.
You can check if you're registered as a charity on the Charities Register on the Charities Services website.
RWT exempt status
A registered charity is exempt from having RWT deducted from its interest and dividend income. This is known as having RWT exempt status.
The RWT exemption register lists the IRD numbers of everyone with RWT exempt status. We automatically add all registered charities to this register.
Having approved donee status means individuals can claim tax credits for donations over $5 that they make to your charity. In addition, companies and Māori authorities can claim a deduction for donations made to an organisation with donee status.
The donee organisation’s funds must be applied wholly or mainly to charitable purposes in New Zealand. This means that the organisation's aims or purposes should be carried out in New Zealand, even if this results in paying money outside New Zealand to achieve these purposes.
You can see if you're a donee organisation on our list of approved donee organisations. If you're a New Zealand charity whose purposes are mainly overseas, you can apply for overseas donee status.
When charities must pay income tax
Charities must pay income tax if they:
- operate without written rules, a constitution or trust deed
- operate under a set of rules, a constitution or trust deed that does not meet the requirement for an income tax exemption
- use business income for charitable purposes outside New Zealand
- are not registered by Charities Services.