Since 1940, to the extent a charity’s charitable purposes are carried out in New Zealand, income derived from charitable business activities has been tax exempt.
Many of New Zealand’s 29,000 registered raise funds through business activities. These activities vary in size and scope. Where tax-exempt business activities directly relate to charitable purposes, such as a school or hospital run be a charity, this is un-contentious.
However, where tax-exempt business activities are unrelated to charitable purposes matters are less clear cut. It is noted that a 2020 OECD study noted that most countries have either restricted the
commercial activities that a charitable entity can engage in, or in the alternative business income that is unrelated to charitable purpose activities is taxed.
Inland Revenue is now seeking feed-back sought on matters relating to the charities and not-for-profit sector. The consultation document considers whether certain tax concessions available to the charitable sector are still effective. The consultation document also explores simplification of tax obligations and compliance minimisation. See Consultation on taxation for not-for-profits
Consultation closes on 31 March 2025.
References
Matters of Trust 
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