If your organisation has been removed from the Charities or Companies Office registers but is still running, you may need to start paying tax.
Tax rules are different for charities and other types of not-for-profits.
Being removed from a Companies Office register
Incorporated societies, charitable trusts and friendly societies can all be registered with the Companies Office.
If your not-for-profit is removed from any of these registers, you may lose your tax benefits and need to get a new IRD number. This depends on your circumstances.
If your not-for-profit was unexpectedly removed but is still running in the same way, please contact the Companies Office as soon as possible to get reinstated.
If you do not get reinstated, this counts as changing your organisation type, and it can affect your tax benefits.
After your charity is removed from the Charities Register, you’ll need to start paying income tax and resident withholding tax (RWT). You may also need to start paying fringe benefit tax (FBT).
Paying income tax
When you'll need to start paying income tax depends on why your charity was deregistered.
If your charity:
- has always kept to its rules held on the Charities Register but has been deregistered because it did not file annual returns with Charities Services, you’ll need to pay income tax from the date it’s deregistered or all appeals or court proceedings are final or exhausted, whichever comes later
- stopped keeping to its rules held on the Charities Register, you’ll need to pay income tax from the date it stopped keeping to its rules
- never kept to its rules held on the Charities Register, you’ll need to pay income tax as if it was never a registered charity.
Your charity may also have to pay income tax on net assets you hold – your charity’s total assets, minus its total liabilities.
This tax on a charity's net assets is called 'deregistration tax'.
Paying resident withholding tax
Your charity will keep its RWT exempt status up to the date it was removed from the charities register.
You’ll need to tell your bank, and anyone else who pays interest or dividends to your organisation, that your RWT exemption has ended. They will start deducting RWT from any payments they make to you.
Your status will be updated to 'Cancelled' on the RWT exemption register.
Fringe benefit tax (FBT)
If you're still operating and providing fringe benefits to your employees, you’ll need to register for FBT.
Can you get another exemption?
In some cases, your charity may be able to get another exemption from paying tax.