Legal Updates
New tax bills for not-for-profits: Be aware of potential changes and have your say
It is widely known that not-for-profits (“NFPs”) in New Zealand receive benefits such as GST concessions and income tax deductions. That may be about to change, as Inland Revenue (“IRD”) is now considering whether NFPs should pay tax on transactions, membership subscriptions and levies.
IRD’s considerations were revealed in a consultation paper released on 24 February 2025, and could lead to significant tax bills for NFPs such as registered charities, incorporated societies, trusts and sports clubs. It is estimated 9000 NFPs may be affected by this proposal, if implemented.
IRD is yet to implement its new interpretation of the Income Tax Act 2007 as it is waiting for the Government’s potential amendments to the Charities Act 2005. It is expected that any such changes will be announced with the Budget, due to be delivered on 22 May 2025.
IRD welcomes submissions on the matters raised in the consultation paper, including any questions that members of the public may have. All submissions must be made by Monday, 31 March 2025 by:
- post to: Taxation and the not-for-profit sector C/- Deputy Commissioner, Policy Inland Revenue Department PO Box 2198 Wellington 6140.
Ford Sumner are NFP experts. If you are concerned about your entity as a result of this paper, please contact Sarah Churstain or Fenella Smith for assistance.