Charities & donee organisations OS released

Inland Revenue (IR) has issued an operational statement (OS) to assist entities in the not-for-profit sector to understand their tax obligations and available tax benefits.

The statement is in two parts, which together make up OS 22/04:

• charities and donee organisations – Part 1 charities, with accompanying fact sheet; and,
• charities and donee organisations – Part 2 donee Organisations, with accompanying fact sheet.

Part 1 of the statement covers, amongst other issues, the various income tax exemptions for the business and non-business income of charities, including:

• resident withholding tax (RWT) exemptions;
• fringe benefit tax (FBT) exclusions;
• goods and services tax (GST) concessions; and,
• interest-free student loans for overseas volunteers of approved charitable organisations.

Part 2 explores the various types of donee organisations and discusses the tax benefits that follow for donors.

Part 2 also covers:

• record-keeping, and the requirement to self-assess and notify if there is a change in status; and,
• winding up and deregistration.

OS 22/04 applies from 10 October 2022.

This article from the 'A Week in Review' newsletter was originally published Monday 17th October 2022. If you have any questions or would like a second opinion on any national or international tax issues, please contact me [email protected].?

If you would like to receive these updates directly to your mail inbox, you can subscribe by clicking here.