Charities Commission and Income Tax on Project Funds

Cette page n'est pas disponible en français et cette matériel est seulment applicable pour les clubs dans Nouvelle-Zélande.

Prepared by Tony Popplewell,  Updated 25.7.2012 by David Fentress,

Kiwanis Clubs are not-for-profit organisations and as such receive the benefit of full or partial tax exemptions on their income.  However, the New Zealand tax laws affecting not-for-profit organisations and charities changed effective from 1 July, 2008.

Under the law changes, only organisations registered with the Charities Commission qualify for full income tax exemptions.  Unfortunately, as currently constituted, many New Zealand Kiwanis Clubs do not qualify as charities under the law and therefore cannot be registered with the Charities Commission.  As a result, non-qualifying Kiwanis Clubs, have only a partial tax exemption and must submit a tax return each year to the IRD.

However, if your club wishes to attain or regain the tax benefits of being a registered charitable organization you can either:

For the first option, a draft Trust Deed in MS Word format is available for download here.  It has been prepared for you to amend and adopt for your club if you decide to proceed to register with the Charities Commission.  Using the draft Trust Deed and following these instructions will assist you to become registered for your community-fund/project account.

If your club decides to establish a subsidiary charitable trust, it can be named after your club, e.g. "Kiwanis Club of [name of your club] Charitable Trust". Your club would need to appoint Trustees to administer the Trust (say four members).  This newly established Trust, once registered with the Charities Commission, would qualify for all the current income tax advantages.  For this reason, it is this entity that should then be used to receive and distribute project money.


1 Download and print off the aforementioned draft Trust Deed and distribute to your Board members for consideration and discussion.
2 Gauge support from club members to establish the subsidiary Trust.
3 If the Board decides to proceed, propose a motion to your members to establish the Trust.
4 Nominate the initial Trustees and put those nominations to your members.
5 Put a motion to pay an initial sum (e.g. $100) to the new Trust from your Kiwanis Club Project account (see clause 2.1 of the Trust Deed regarding establishing the Trust Fund).
6 Complete the draft Trust Deed, inserting names etc as indicated, and have the Trustees sign it.
7 Complete the registration process with the Charities Commission, either online or by paper. (Forms can be downloaded from
8 Send a copy of the executed Trust Deed, together with a completed IR596 (which can be downloaded from the IRD website, to the IRD to register the entity and obtain an IRD number.
NB: Steps 7-8 can be completed simultaneously, but it is step 7 that is imperative to ensure you qualify for the full income tax advantages.
9 Establish a separate bank account for the new Trust and:
(a) Transfer the initial sum (as in note 5 above).
(b) Transfer all your remaining funds from your projects account to the Trust and
(c) ensure any Project funds that are collected in the future go into and are paid out of that bank account. (This will effectively operate like your Club's current project account, but decisions are made by the Trustees rather than the Board, although the Board would most likely give advice to the Trustees.)
10 Remember to file the Trust's annual returns with the Charities Commission (which they will then forward it to the Companies Office).
Keep to the standard wording of the Trust Deed.  Acceptance by the Charities Commission and the IRD will be easier if all Kiwanis Clubs use the same wording.

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Page last updated by (David Fentress) on 10 March, 2013.
Your comments, questions and suggestions are welcome.