1. Future of Charities and Tax
School of Tax and Business Law
Future prospects for Charity Law, Accounting and Regulation Conference 2019
Future of Charities and Tax
Professor Fiona Martin
School of Taxation and Business Law
Business School
Wellington, New Zealand, April 2019

2. Charity Profiles Australia New Zealand No of charities 53,000 27,000
Staff employed
10.6% of all employees
180,000 (full time and part time)
Main charitable purposes
Religion and education
Education and religion
Income /size
67.3% charities income
< $250,000
58% charities expenditure
< $125,000

3. Income Tax Exemptions Country All income exempt
Limitations to exemption from income tax
Australia
Yes
Nil
New Zealand
Business income exempt except where charity carries out its charitable purposes outside NZ
New provision that trading subsidiary must also be a charity to be income tax exempt
England
Partly
All business income.
Charitable trade income taxable if not used for the charities’ charitable purposes.
But not taxable if under a certain threshold depending on the annual gross income of the charity
USA
Unrelated business income is taxable
Hong Kong
Unrelated business income is generally taxable
Income Tax Act 2007 (NZ) s CW 41.
ibid (NZ) s CW 42(1).
Income Tax Act 2007 (UK), c 3 s 525; Corporation Tax Act 2010 (UK), s 478.
26 USC §§ 511–14 (2006); Department of the Treasury, ‘Tax on Unrelated Business Income of Exempt Organisations’ (Publication 598, Internal Revenue Service 7 January 2015).
Inland Revenue Ordinance (Cap 112, Laws of Hong Kong) § 88 states, ‘and either (a) the trade or business is exercised in the course of the actual carrying out of the expressed objects of such institution or trust; or (b) the work in connection with the trade or business is mainly carried on by persons for whose benefit such institution or trust is established’.