Charitable donee organisation

(Clause 34)

Summary of proposed amendment

Cure Kids is to be recognised as a charitable donee organisation by being added to the list of charitable donee organisations in schedule 32. This will enable donors to obtain tax relief on their donations to Cure Kids.

Application date

The amendment will apply from the 2010–11 tax year.

Background

For an overseas-focussed charitable organisation to be a charitable donee organisation, it must be added to schedule 32 of the Income Tax Act 2007.

Individuals who donate to charitable donee organisations are entitled to a donations tax credit of 33⅓ percent of the amount they have donated up to the level of their taxable income. Companies and Māori authorities who donate to charitable donee organisations are entitled to a deduction for donations up to the level of their net income.

The decision to recognise an organisation as a charitable donee organisation is a specific policy decision by the government. This means the government’s decision to recognise an organisation as a donee organisation involves various considerations including wider government overseas aid objectives and fiscal implications, as well as the credibility and internal controls and management of the organisation.

Cure Kids was established in 1971 to conduct, support and fund research into the health of children, and to make the best use of the knowledge so gained for the furtherance of health and the cure, prevention and treatment of disease in children. Cure Kids now wishes to extend its work initially to Fiji and later to other countries.

The amendment will allow Cure Kids to be recognised as a charitable donee organisation and allow donors to claim tax relief on their donations to Cure Kids.