A copy of the consultation document can be requested by emailing [email protected].
If people want to submit but are unable to meet the 24 December deadline, it can be extended by request. However, Inland Revenue aims to review all submissions by late January 2026.
To support consultation, Inland Revenue has produced some explanatory material, focusing on membership subscriptions.
Taxation and the NFP sector: targeted consultation on detailed design
In February to March 2025, policy officials conducted public consultation on tax matters relating to charities and the NFP sector. Taxation and the not-for-profit sector
In April to June 2025, Inland Revenue consulted on the draft operational statement “Mutual transactions of associations (including clubs and societies)”. Mutual transactions of associations (including clubs and societies)
Inland Revenue took into account submissions on both consultations and reported to Ministers in August 2025. Ministers made decisions in September 2025 about what policy work would stop and what would continue. In October 2025, the Minister of Revenue publicly announced what would continue. Refreshed policy work programme released
In November 2025, Inland Revenue began targeted consultation with around 50 people and a cross-section of groups who had provided feedback on the previous consultation. This covers donor-controlled charities, membership subscriptions and simplifications for donors.
Membership subscriptions and related matters for taxable NFP organisations
Membership subscriptions charged by tax exempt NFPs, such as New Zealand’s 29,000 registered charities and 19,000 amateur sports clubs, are currently not taxable and we are not proposing this will change.
For many years, the profits of taxable NFPs from trading with members have been considered to be taxable income, whereas membership subscriptions were considered to be covered by the “mutuality principle” and therefore not taxable income. This remains Inland Revenue’s current position.
As outlined in the April to June 2025 consultation, Inland Revenue drafted an operational statement indicating that it is likely to formally change its view and state that under current law many membership subscriptions would be taxable.
When a draft operational statement suggests that Inland Revenue may change its view on how existing legislation should be interpreted, policy advisors and Ministers have the opportunity to consider whether the new approach is consistent with the Government’ s original policy intent.
If it is considered inconsistent, officials may recommend that the Minister amend the legislation. In this case, the Minister of Revenue has directed policy officials to consult on a practical solution to change the current law. Our intention is that the large majority of membership subscriptions would remain non-taxable. Officials are exploring how this could be achieved. For example, options that have been suggested include:
- Introducing a definition of membership subscription. This would distinguish non-taxable payments that provide core membership benefits from taxable payments that confer identifiable, direct benefits in the form of goods or services (even if described as a membership subscription).
- Introducing a safe harbour. For example, if a membership subscription entitles the member to some identifiable direct valuable benefits in the form of goods or services, the whole membership subscription payment could still be treated as non-taxable if those benefits are within the safe harbour.
- Introducing a de minimis. This would ensure small NFPs would not need to consider whether their subscription entitles members to identifiable direct valuable benefits in the form of goods or services, or whether they are within a safe harbour. Small NFPs would not pay tax on any subscription income.
The targeted consultation also seeks feedback on detailed policy design proposals to:
- allow more income to be tax-free by raising the annual tax-free threshold from $1,000 to $10,000
- simplify income tax return filing requirements for taxable NFPs, and
- require banks and other financial institutions to provide Inland Revenue with financial information for all their NFP customers who use the tax-free threshold.