Chartered Accountants ANZ (CA ANZ) has voiced opposition to a proposed change in tax treatment for not-for-profit (NFP) organisations in New Zealand, a move they believe could threaten the country’s culture of volunteerism.
The Inland Revenue’s draft statement suggests a shift in the Commissioner’s position regarding the tax treatment of member subscriptions and levies of non-profit bodies, potentially ending their tax-exempt status.
Chartered Accountants ANZ tax leader John Cuthbertson said: “This change would reverse a long-standing practice, in place since the 1940s, to treat this income as tax-free, which has cultivated New Zealand’s rich history of not-for-profits for the public good.”
New Zealand possesses a strong volunteer sector, with people coming together to provide community services and form various mutual organisations, including local sports clubs and professional bodies.
Cuthbertson said: “They have created huge public value along the way, and we do not believe their work should be undermined through additional taxation.”
He noted that most small clubs operate with minimal cash reserves and rely on volunteers, aiming to break even annually.
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By GlobalDataThe current tax treatment of NFPs is inconsistent, leading to confusion among organisations about whether to treat member subscriptions and levies as tax-exempt.
Chartered Accountants ANZ argues that the “unique” nature of the NFP sector warrants exemption from taxation to avoid placing an undue burden on these volunteer-reliant entities.
Cuthbertson added: “If there are concerns that some people or organisations might be misusing the tax-free status, then authorities should respond by conducting focused investigations and enforcing the rules where necessary.”.
He said that CA ANZ advocates a legal amendment to confirm the tax-exempt status of these transactions, highlighting the role not-for-profits play in New Zealanders’ lives.
“Thousands of chartered accountants give their time to not-for-profits for free, to enable their public good, and they are telling us they are concerned about their future viability if additional tax must be paid,” Cuthbertson added.
Recently, CA ANZ also supported the treasurer’s intention to discuss tax reform at the Productivity Roundtable in August 2025.
