Functions

Charities Services, Ngā Rātonga Kaupapa Atawhai, (formerly known as the Charities Commission), started receiving applications for registration when it opened the Charities Register website on 1 February 2007.

Charities Services, which is part of the Department of Internal Affairs, promotes public trust and confidence in the charitable sector by registering and monitoring charities and processing annual returns. They also encourage good governance and management practices.

Charities Services has two main functions:

• to register and monitor charities
• to provide education and support to the charitable sector.

Registration

Charities Services considers applications for registration from any organisation that meets its criteria. The organisation does not have to be incorporated. The main criteria are:

• the name needs to be suitable i.e. not offensive or liable to mislead the public
• the purposes need to be charitable
• the officers need to be qualified under the terms of the Charities Act.

Name

If an organisation is already incorporated (e.g. an incorporated society or registered charitable trust), the name of the organisation is the same name under which it was incorporated. Otherwise, Charities Services decides if the name is offensive or liable to mislead the public.

Charitable Purposes

Key criteria for charitable status are:

• income derived by the organisation is for charitable purposes i.e. the relief of poverty, the advancement of education, the advancement of religion or any other matters that are beneficial to the community
• the organisation is established and maintained for charitable purposes and not for the private monetary gain of any individual.

Qualification of officers

Officers (all trustees and all members of a board or governing body) will need to meet the qualification requirements of the Charities Act. The disqualifying factors are set out in section 16 of the Act, and include being an undischarged bankrupt, being under 16 years of age, having a conviction for dishonesty within the last seven years, as well as other criteria.

Tip: For information on what charities need to do to register and for online assistance with the registration process, visit: https://www.charities.govt.nz . It's free to register but there will be ongoing costs for filing your annual returns if your charity has a gross income of $10,000 or more. The fees are $51.11 for an online return and $76.67 for a paper return.

 Tax exemptions

Although registration with Charities Services is voluntary, charitable organisations that want to obtain charitable tax-exempt status must be registered with Charities Services.

There are further requirements in the tax legislation that mean following registration, charities will need to consider whether they meet the requirements for the tax exemptions. In most cases, charities with non-business income only (e.g. investment income such as interest and dividends) that are registered under the Charities Act will qualify for the exemptions. If a charity has business income, it will need to consider some further criteria.

On registration with Charities Services, charities will receive correspondence from Charities Services, notifying them that their application has been successful, and information from Inland Revenue to assist them in determining their tax position.

Charities Services will advise Inland Revenue of a charity's registration so there may be no need to do so separately. Also, registered charities don't need to apply to Inland Revenue for donee status. Donee status means that individuals can claim a tax credit, and companies and Māori authorities can claim a deduction, for charitable donations from the public. Inland Revenue will determine whether your organisation qualifies for donee status by using the information provided on your application to register as a charity.

Tip: For further general information on the Charities Services and the registration process, Charities Services website: https://www.charities.govt.nz

For more information on the various tax exemptions available to charitable organisations, visit Inland Revenue's website: https://www.ird.govt.nz/roles/charities

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