cheap lenses australia

International Charities’ help required

Are you an international charity that has recently applied for listing on Schedule 32 of the Income Tax Act 2007?  Or do you have a client in this position?  If so, we would like to hear from you.

Very briefly, Schedule 32 status is afforded to a select few international charities, and with the lifting of the caps on donations credits and deductions, there has been a flood of applications to be listed.

The Government was so inundated with requests that it even published special guidelines to charities on how to make the application.  The issue is very simple, if a charity does not have its charitable purposes principally in New Zealand, then that charity cannot qualify as a donee organization unless it is listed on Schedule 32.

In addition, the whole area is currently under consideration, and the Government is likely to produce new guidelines on how to apply for this status.  If you are interested in helping influence policy in this area then please contact the author at the contact details provided under the author profile.

Don’t get tripped up by confusing IRD correspondence on donee status!

International charities, or their advisors, can easily get tripped up.  This is so because the application for donee status as part of registration with the Charities Commission is not very clear, and possibly not correct.

Briefly the problem is as follows:  the law provides that donee organizations are those organizations with their charitable purposes principally in New Zealand.  Now there is no case on this, but it is accepted that if your purposes are more than 50% in New Zealand then you will qualify.  Note that it is where your purposes are, not where you spend your money that is the important question.

Your purposes could all be overseas, and you can spend all your money in New Zealand.  For example, where you send blankets purchased in New Zealand to the poor in Romania.

When charities are applying with the Charities Commission for registration, Form 1 question 22 asks:

“What percentage of New Zealand sourced funds did you spend overseas in the last financial year? If the entity has not been operating for a year, what percentage of New Zealand sourced funds does it intend to spend overseas in the next financial year?”

The explanation of this questions attempts to clarify the point regarding where charitable purposes are, but our experience is that this question still confuses some charities.

We understand that IRD practice is to send out a “donee letter” if the charity puts down anything less than 50%.  If you are a charity that spends your money in New Zealand, but your purposes are restricted to purely overseas purposes, you may think that this letter allows you to give tax-deductible receipts.  It does not.  You need to apply to be listed on Schedule 32 before you can get donee status.  You don’t qualify under the normal provisions for donee status (but there are some other ways you can qualify not covered in this post).

For other articles relating to New Zealand charities law refer to our firm’s blog.

2 Responses

Terry Baucher on April 13, 2010 at 9:54 am

A belated thanks for this Sybrand, I’ve had a query about the issue of spending money overseas and the 50% rule gives me a bit of comfort.

Byron on May 16, 2012 at 6:03 pm

I thank you for your very informative post, It is one that I wished I found four months ago. However are you able to please inform us in the application process for Schedule 32 application.

Thank you

Write a Comment

Take a moment to comment and tell us what you think. Some basic HTML is allowed for formatting.


Recent comments

  • Peter: When you have more than one job all your income is added up and you pay tax on the total income amount. For...
  • Joanne Martin: Hi Would you be able to email me to discuss a small company that is an LTC which I need some advice on...
  • Rizwana Saheed: You are on the right track that there is an exemption when employees work overtime but whether or not...
  • bryan: as a group of employees we get paid meal money if we exceed 11hrs on any day. Employer says he wants to tax...
  • linda: My mother is 94 and has dementia. With govt assisted carers she is still living in a home gifted within the...
  • Sharon: Hi Daniel, Can you please advise how owners of a profit-making LTC pay themselves? The owners used to pay...
  • Another Anne: My Dad is in care on full subsidy. I am EPOA. Are we able to gift some money to my brother in UK so...
  • Twagilayesu Isaya: I agree with the author of this article that Inland Revenue Department need to provide clear...
  • Quinn: Hi. I would like some clarification regarding the valuation of the investments component of the owners basis...
  • QROPS Pensions: Interesting piece of writing, you always write the most useful content & TalkTax is no exception...

Upcoming Events

  • No events.


In the past 12 months, do you think the amount of IRD investigations being undertaken has?

View Results

Loading ... Loading ...


    For the moment, we have no authors