Legislation introduced in 2021 made it easier for businesses to donate trading stock to approved donee organisations (which are mostly registered charities) as well as to public authorities and non-associated persons.
Normally if you give your businesses trading stock away you still might have to pay tax as if you'd sold them. But if you've donated trading stock between 17 March 2020 and 31 March 2024, you might be able to claim an expense for the cost of the trading stock you donated. For example, to help people affected by COVID or because of the February 2023 weather events.
Temporary relief
This concession is for trading stock donated from 17 March 2020 to 31 March 2024.
The temporary relief is available so that you can claim an expense for the stock you donate to:
- donee organisations
Approved donee organisations - public authorities, for example public hospitals
- non-associated persons - people or businesses you are not associated with.
Disposing of stock
Disposing of stock includes donating, but it is also selling, giving away or getting rid of stock at below market value.
You may still qualify for a tax deduction if you dispose of your stock to a person or business that is not an approved donee organisation or public authority. This is only if you are not associated with them. You need to be able to show you have a business reason for disposing of the trading stock at below market value. For example, you may dispose of the trading stock for marketing purposes to increase your customer loyalty and brand awareness.
It is best to talk to your tax agent if you have one, as it can be complicated.
The legislation
Find more information about this change:
The orders extending the relief can be found on the New Zealand legislation website.
Tax Administration (Extension of Period of Relief for Certain Disposals of Trading Stock) Order 2023
Tax Administration (Extension of Period of Relief for Certain Disposals of Trading Stock) Order 2022
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