Generally, registered charities do not pay tax or file income tax returns – they are exempt.
Getting a tax exemption
To get a tax exemption as a charity, you need to register with Charities Services. You can check if you’re on the charities register.
To register, your charity must meet 2 main conditions.
- The charity's purpose and activities must be fully charitable (for relieving poverty, advancing education or religion, or anything else that benefits the community).
- None of the charity's income can be used or available to benefit any of its members, trustees or associates.
If your charity is not a New Zealand resident, you may not be able to register with Charities Services.
If you cannot register with Charities Services, you may still be able to apply for a tax exemption with us.
If your business earns income for a charity
From the 2020-2021 year, any person or organisation that runs a business to benefit a charity must be registered with Charities Services to get or keep a business income tax exemption.
For example, a company that’s 100% owned by a registered charity and whose constitution stops any individual getting benefits from the company.
Only the business income used for charitable purposes in New Zealand is exempt. If it's used for charitable purposes overseas, you need to pay tax on it.
Filing returns if you have an income tax exemption
If your charity is exempt from all income tax, you will not need to file an income tax return unless we ask you to.
No tax on your interest and dividend income
If registered charities have a full income tax exemption, they also do not pay resident withholding tax on their interest and dividend income.