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Dunne clarifies charities and tax

Media statement
For immediate release
Monday, 21 April 2008

Dunne clarifies charities and tax

Revenue Minister Peter Dunne is reminding people and charitable organisations that the availability of tax rebates for making charitable donations does not depend solely on whether a charitable organisation has registered with the Charities Commission.

“People who make charitable donations to organisations that are not registered with the Charities Commission can still claim tax rebates for their donations if the organisations involved have Inland Revenue-approved donee status,” Mr Dunne said today.

“Some confusion over the difference between approved donee status and charitable status has arisen as the 1 July deadline for organisations to register with the Charities Commission draws near.

“Organisations must have Inland Revenue approval for their donors to be able to claim a rebate, while they must register with the Charities Commission if they are to have tax-exempt status.

“When they do register with the Charities Commission it will forward their names to Inland Revenue for inclusion in the approved donee organisation list.

“But if, for whatever reason, an organisation does not register with the Charities Commission, its donors can have access to tax rebates if the organisation is registered with Inland Revenue as an approved donee organisation.

“And from the current income tax year some very important rebate and deduction changes come into effect. They are incentives for individuals, companies and Maori authorities to donate more to charities and other non-profit organisations – that in turn will benefit charitable and philanthropic organisations generally as well as the communities they serve.

“The caps on the dollar amounts of charitable donations that are eligible for tax relief have been removed.

“That means individuals can now claim a 33⅓% tax rebate for cash donations up to their annual net income – the old $1,890 threshold for donations has gone.

“The good news for companies is that their entitlement to a deduction for donations made to charitable organisations is now limited only by the amount of their net income. The company deduction has also been extended to unlisted close companies (companies with five or fewer shareholders).

“New Zealanders are generous in giving money and time for charitable and philanthropic purposes.

“An estimated one million people take part in voluntary activities of one kind or another, and donations to charities and other non-profit organisations amount to over $350 million a year – a figure that includes just those people who claim tax rebates for their donations,” Mr Dunne said.


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