Update on charities and not-for-profit tax issues

5 May 2025

Last week, Finance Minister, Hon Nicola Willis announced that no changes relating to the charities and not-for-profit tax issues covered in the Taxation and the not-for-profit sector issues paper would be included in Budget 2025.

The Minister of Finance said the consultation on the Issues Paper uncovered a lot of complexity about definitions and rules and how charities and not-for-profits would react in practice.  She has asked officials to consider the submissions in detail and report to her again in the coming months.  For any issues the Government decides to progress after it has considered the detailed report on submissions, it is likely to make decisions by the end of the year. That will allow officials time to consult further before providing final advice.

As indicated in the issues paper, Inland Revenue have now released a draft operational statement relevant to not-for-profits that are not tax exempt. The draft operational statement sets out the Commissioner's view on how profits from certain not-for-profit member transactions, including subscriptions in certain circumstances, may be taxable.

Read the Draft Operational Statement Here

Consultation is open on the Draft Operational Statement with feedback due 25 June 2025.

The Minister of Finance has asked policy officials to report back to her after that consultation has taken place. If applying the current legislation in line with the Commissioner’s view would be impractical and unworkable, then in fairness the government would look at taking a pragmatic approach and consider amending the legislation.

As with the previous consultation, Clubs New Zealand will be seeking advice in order to submit on behalf of members and we will be sure to keep you updated as we progress through the submission process.