Tax information
Inland Revenue administers charitable tax exemptions from things such as income tax and resident withholding tax. They also approve donee status which gives tax benefits to people giving donations to your organisation. Inland Revenue generally accepts Charities Services’ decisions regarding charitable registrations, so in most cases tax exemptions and donee status are approved.
Guidance can be found on the Charities(external link) section on the Inland Revenue website or in the IR255 Guide(external link) – Charities and Donee organisations.
When a charity is registered as a charitable entity, we advise Inland Revenue. We also advise them of organisations who have been deregistered for any reason.
A registered charity need only contact Inland Revenue directly if there is a possibility that a tax return needs to be filed (if it is thought that there is taxable income), or for other tax matters such as GST, PAYE, FBT or changes to records.
Resident withholding tax exempt status
If you have an exemption from having resident withholding tax (RWT) deducted from interest and dividend income, this is known as having RWT exempt status.
There is an RWT exemption register(external link) on the Inland Revenue website that lists the IRD numbers of everyone with RWT exempt status.
From 1 April 2020, payers of investment income (e.g banks) will access the RWT exemption register to confirm which of their customers have RWT exempt status. They will no longer ask for or accept physical certificates of exemption.
Donee status
From 1 April 2020, charities need to be registered with Charities Services in order to qualify for or retain donee status from Inland Revenue.
Having approved donee status from Inland Revenue, means individuals can claim tax credits for donations over $5 that they make to the charity. In addition, companies and Māori authorities can claim a deduction for donations made to an organisation with donee status.
As part of the application process to become a registered charity, organisations are asked if they intend to receive funds from donation/koha. If charitable status is approved, your details will then be supplied to Inland Revenue and donee status is usually granted.
You can check if you are on the approved donee organisation list(external link) on Inland Revenue's website.
Note: If you spend money delivering your charitable purpose overseas (providing disaster relief, delivering aid and so on) Inland Revenue will assess your eligibility for donee status differently. Refer to Inland Revenue's website(external link) for more details about overseas donee status.
What information do charities need to put on a receipt for a donor?
Donation receipts need to show:
- donor’s full name
- the amount they donated
- the date they donated
- a clear statement that it was a donation
- your organisation’s name, Charities Services registration number and IRD number
- your official stamp or logo or letterhead
- The full name, designation, and signature of an authorised person from your organisation
- A receipt number, unique to each receipt
Getting a replacement receipt
If a donor needs a replacement receipt, the same information needs to be on it as on the original receipt. The word "Copy" or "Replacement" should be clearly visible on the receipt.
If a donee organisation has issued a receipt for a donation that is later refunded, they must advise the donor to destroy the receipt. If the donor has already made the claim for the donation, the donor must advise Inland Revenue, as their tax credit (formerly called a "rebate") will need to be adjusted.
While it is not a requirement to put your charities registration number on receipts, Charities Services encourages you to use this number on all promotional material.