Tax changes making giving easier
What it means for individuals
Individuals
are now able to claim a rebate of one-third (33.33%) of all donations they
make, up to the limit of their taxable income.
For example:
Kath donates $10,000 to charitable
organisations. Her taxable income for the 2008–09 year is $40,000.
What it means for companies
Companies
and MÄ?ori authorities can now get deductions for all donations (up to the
company’s income) made to donee organisations.
For example:
Company Ltd is a publicly-listed
company. In the 2009 tax year (1 April 2008 -
31 March 2009), Company Ltd supported the local community charities,
donating $20,000. Company Ltd’s net income before taking into account its
donations was $200,000.
Under the new rules, the
full $20,000 can be deducted. Under the old rules, Company Ltd is entitled to a
tax deduction of $10,000.
The
previous 5% limit on deductions that companies could claim for cash donations
has been removed.
What it means for the community
The changes
will benefit all New Zealanders and the work organisations do in our
communities.
Many
organisations working in the community are reliant on multiple sources of
funding. The tax changes will make it easier for individuals and companies to
support their work.
To get the
level of services we need at a local level, we need to sustain a culture where
the giving of time and money is valued and recognised as an important social
and economic contributor.