Income tax exemptions and donee status give benefits to charities or to people, companies or Māori authorities who make donations to your charity.
Getting an income tax exemption
To become a 'tax charity' and qualify for the charitable income tax exemption an organisation generally needs to be a registered charity under the Charities Act 2005. Registration is done by Charities Services (Department of Internal Affairs) and they advise Inland Revenue when a charity is registered.
However, if a non-resident charity is unable to register with Charities Services because it does not have sufficient connection to New Zealand it may apply to Inland Revenue to be treated as exempt from income tax on non-business income. This will enable the non-resident charity to derive non-business income from New Zealand but not be liable for New Zealand income tax or non-resident withholding tax.
When we might approve your charity
We can approve your organisation as a tax charity if it:
- is not resident in New Zealand.
- carries out charitable purposes overseas.
- does not apply its funds for private profit.
- is recognised as being charitable by one or more overseas charities regulators or tax authorities.
Your charity must also be able to:
- provide evidence your charity was declined registration by Charities Services due to an insufficient connection to New Zealand, or
- explain why you believe you will not be able to register with Charities Services.