(Updated 28 Sep 2019)
If a non-profit organisation is registered as a Charity with DIA Charities, and has indicated during the application process that Koha/Donations will be a source of funding, it will be recognised by IRD as a ‘donee organisation’ and receipts for donations can be claimed as a credit against a donor’s tax.
IRD have recently clarified that only gifts of money, (cash, electronic bank transfers, credit cards, and cheques) qualify as gifts eligible for donation tax credits or gift deductions. This does not include gifts in kind or debt forgiveness. <Recent tax legislation changes for charities, not-for-profits and donee organisations>
There are certain requirements, on the organisation and on the donor:
To be accepted by IRD, charities must ensure that donation receipts contain the following information:
- the name of the donor(s)
- the amount of the donation
- the date of the donation
- it must clearly state that it is a donation (ie is an unconditional gift)
- be signed by an authorised person
- contain an official stamp* with the name of the approved donee organisation.
(*the official stamp is different to the official seal which may be required by the charity’s rules)
It is recommended that the charities registration number (CC12345) also be shown on the receipt (this is often incorporated into the official stamp).
Koha is a payment or receipt of money, similar to a donation. <Recording koha as part of a Tier 4 Charity’s Performance Report>
IRD have recently updated a detailed guide for charities which is entitled “Charitable and donee organisations (IR 255)”. <Download the guide>
Donations (up to the level of a person’s taxable income) which have been made to donee organisations may be claimed as a credit from IRD by submitting
A recent change to tax legislation is that donation receipts can now be submitted electronically during the year to a person’s myIR account with donations tax credits claimed as part of the end of year income tax process. However, a separate donation tax credit claim form can be submitted by a tax payer should they wish to.
Once registered for a myIR account, supporters can upload their receipts in myIR at any time. They can upload photos or scans of paper receipts, but if you provide an electronic receipt this makes it even easier.
At the end of the tax year, your supporters won’t have to complete a paper form. We’ll automatically calculate the credit and pay it into their bank account within three weeks.
To help your supporters claim the donation tax credit, make sure your receipts include the information detailed above:
Let your supporters know our myIR online services will help them claim their entitlements more easily and quickly.
For more information go to the IRD website