If your koha is an unconditional gift you do not have to pay GST on it. An unconditional gift is a voluntary payment to a non-profit body that does not benefit the payer or giver in the form of goods or services.
If the koha, such as payments, goods or services are not an unconditional gift they will be liable for GST.
Deciding if your koha is liable for GST
Using the unconditional gift rule will let you know whether your koha is liable for GST. To help you decide, we’ve added some examples below. They’re based on a non-profit marae registered for GST.
GST on marae member payments
When a marae member gives money, goods or a service (koha) to their marae and expects nothing in return, then it's not subject to GST or liable for income tax.
Types of payments not taxed are:
- money given to bereaved family or committee at a tangihanga or hura kōhatu
- money given to a married couple or committee at a mārena
- koha given to a marae committee to assist in paying for a building house or church
- visitors on a marae giving a collection to donate to the marae committee
Types of payments that must be taxed are:
- a government department giving payment on a marae
- tourists given a tour on a marae for a fee
- fund raising activities by marae committee
- a marae building is made available for a function in exchange for koha.
Koha given to the tangata whenua
A group of people arrange to stay on your marae for a couple of nights at no charge by your marae. The group gives a koha to the tangata whenua at the pōwhiri.
The koha is an unconditional gift and is not liable for GST. It’s unconditional because the payment was voluntary and not given for goods or services.
Staff workshop on your marae
A company holds a two-day staff workshop for thirty people on your marae. You charge a fee of $50 per person per day. You must charge GST, because the money is paid for the goods and services supplied by you. You can claim GST on all goods and services you purchase to host this workshop.
Participants give a koha after staff workshop
After the workshop (in the example above) some of the participants give a koha to you in appreciation of the hospitality shown. As this koha is not for goods and services you have supplied and gives no direct benefit to the payers/giver, it is an unconditional gift and not liable for GST.
If your marae is not registered for GST, it cannot charge GST for any goods and services they supplied and cannot claim GST back on goods and services they pay for.