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Inland Revenue administers charitable tax exemptions from things such as income tax and gift duty for people who give gifts to charitable entities. Inland Revenue generally accepts Charities Services’ decisions regarding charitable registrations, so in most cases tax exemptions are approved.
Guidance can be found on the Non-Profits(external link) section on the Inland Revenue Department (IRD) 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. Conversely, 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 or changes to records.
From 1 April 2020 all charitable entities with charitable purposes need to register with Charities Services in order to qualify for or retain donee status.
This change has no impact on donee organisations that have benevolent, cultural or philanthropic (but not charitable) purposes that have already been granted donee status through Inland Revenue.
Having donee tax status qualifies your organisation for tax benefits, such as donations of money qualifying the giver for a donations tax credit or a tax deduction.
Having approved donee status from Inland Revenue allows individuals to claim a tax rebate for donations that they make to charities. In addition, companies and Māori authorities can claim a deduction for donations made to charities with donee status.
Registered charities receiving donations/koha generally receive donee status from Inland Revenue, unless they operate overseas.
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.
Further information is available at www.ird.govt.nz/roles/non-profits/donee-organisations-needing-to-register-with-charities-services(external link)
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.
Donation receipts need to show:
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 issues a receipt that has later been 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.