Charities with overseas purposes

(Clauses 2(15) and 61)

Summary of proposed amendments

The bill adds three new charitable organisations to schedule 32 of the Income Tax Act 2007. Donors to the following charities will be eligible for tax benefits on their donations:

• The Hunger Project New Zealand;
• OneSight New Zealand; and
• Fund for Timor.

Application date

The amendments will apply from 1 April 2013.

Background

Donors to organisations listed in schedule 32 are entitled as individual taxpayers, to a tax credit of 33⅓% of the amount donated, up to the value of their taxable income. Companies and Māori authorities may claim a deduction for donations up to the level of their net income. Charities that apply funds towards purposes mostly outside New Zealand must be listed in schedule 32 of the Income Tax Act 2007 before donors become eligible for these tax benefits.

The three charitable organisations being added to schedule 32 are engaged in the following activities:

• The Hunger Project New Zealand works to reduce hunger and poverty in South Asia, Africa and Latin America. The aim of the group is to assist local groups to improve health education, nutrition and family income.
• OneSight New Zealand works to assist people with vision impairment, eye diseases and eye afflictions.
• Fund for Timor aims to improve education and literacy in remote areas of East Timor by funding local teachers’ salaries.