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Income Tax Act 2007

Income - Excluded income - Exclusions and limitations

CX 25: Benefits provided by charitable organisations

You could also call this:

“Tax rules for benefits from charities to their employees”

When a charitable organisation gives you something nice, it’s usually not counted as a fringe benefit. But there are two times when it might be:

First, if you get the nice thing mainly because of your job, and your job is part of a business the charity runs that’s not about being kind or helping others.

Second, if the charity lets you buy things using their money (called a short-term charge facility), and the value of what you buy in a year is more than 5% of your pay or $1,200, whichever is less.

A short-term charge facility is when you can buy or hire things that aren’t related to your job or the charity. You might pay by charging it to an account or giving something other than money. The charity has to pay for some or all of it. This doesn’t include the kind of benefit talked about in section CX 10.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513384.

Topics:
Money and consumer rights > Taxes
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“Employer-provided health and safety benefits that aren't taxed”

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“Job benefits not taxed when your income isn't taxed”

Part C Income
Excluded income: Exclusions and limitations

CX 25Benefits provided by charitable organisations

  1. A charitable organisation that provides a benefit to an employee does not provide a fringe benefit except to the extent to which—

  2. the employee receives the benefit mainly in connection with their employment; and
    1. the employment consists of the carrying on by the organisation of a business whose activity is outside its benevolent, charitable, cultural, or philanthropic purposes.

      1. Subsection (1) does not apply, and the benefit provided is a fringe benefit, if a charitable organisation provides a benefit to an employee by way of short-term charge facilities and the value of the benefit from the short-term charge facilities for the employee in a tax year is more than the lesser for the tax year of—

      2. 5% of the employee's salary or wages:
        1. $1,200.

          1. For the purposes of the FBT rules, a short-term charge facility means an arrangement that—

          2. enables an employee to obtain goods or services that have no connection with the employer or its operations by—
            1. buying or hiring the goods or services:
              1. charging the cost of the goods or services to an account:
                1. providing consideration other than money for the goods or services; and
                2. requires the employer to provide some or all of the payment or other consideration for the goods or services; and
                  1. is not a fringe benefit under section CX 10.

                    Compare
                    Notes
                    • Section CX 25(2): replaced, on , by section 21(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
                    • Section CX 25(3)(a): replaced, on , by section 21(2) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
                    • Section CX 25(3)(b): replaced, on , by section 21(2) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
                    • Section CX 25 list of defined terms employer: inserted, on , by section 21(3) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
                    • Section CX 25 list of defined terms salary or wages: inserted, on , by section 21(3) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
                    • Section CX 25 list of defined terms tax year: inserted, on , by section 21(3) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).