IRD is getting upset about “donations” which are really inthe nature of fees for services. In Revenue Alert14/01 it lists the criteria for a donation. When you analyse the list itamounts to:
- The gift is madevoluntarily
- Nothing is receivedback in return for the gift either by the giver or anyone associated
- The charitydoesn’t have to give anything away in return for receiving the gift.
GST is also an issue. These “donations” are reallybeing paid for services. Therefore the education centre must charge GST. The department says penalties and interest may be appliedif it catches anyone transgressing.
What can you do? If this announcement affects you andyou have been used to claiming these donations, you may need to forgo theseclaims, which is, of course, exactly what the IRD wants to achieve.
IRD Mileagerate unchanged
Mileage rates are unchanged. They remain at 77 cents perkilometre. This is the third year at this rate.
BodiesCorporate and Look-through rule
The owners in Bodies Corporate are to be allowed to claimGST, if they are registered, even though the Body Corporate will not be allowedto register for GST from 6 June 2014. Registered clients will thus be able toclaim their share of expenditure on rates etc, as though the Body Corporate was GST registered.Note: These changes relate only to Bodies Corporate registered under the UnitTitles Act 1972 and 2010.
Fines are not tax deductible and there is no GST. This includes parking fines levied by a City Council.Parking fines issuedby Wilson’s Parking are not statutory fines and are therefore claimable. Theyare merely an additional fee. They have GST in them.
New IRD phone scam– Be Aware!
IRD are warning their customers of avery aggressive phone scam. Scammers are targeting their customers formoney and threatening actions such as deportation and prison if they don’t pay.The caller ID that appears when the scammer calls isthe same number as the IRD Customer Services number, 0800 227 774.