Charities with overseas charitable purposes

(Clause 105)

Summary of proposed amendment

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:

• Kailakuri Health Care Project – New Zealand Link
• Marama Global – Education
• Marama Global – Health

Application date

The amendments will apply from 1 April 2014.

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 Kailakuri Health Care Project – New Zealand Link provides low-cost medical services in Bangladesh.
• Marama Global – Education provides school facilities and teaching resources in North Korea and Uganda.
• Marama Global – Health provides basic and emergency obstetric and maternity equipment, supplies and training in Somalia.