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Understand tax language

If you want to be able to speak confidently to potential donors about tax incentives, and how they can benefit from them, it is a good idea to know the following terms.

Close company - a company which is under the control of five or fewer people or other companies. 

Donation - a gift given from one person or organisation to another. This is different to a payment given in return for goods or services.

Donee - a person or organisation receiving a donation. Donors need to donate to an IRD-approved donee organisation to get a tax credit. To become an IRD-approved donee organisation, see the charitable organisations section of the IRD website.

Donor - a person or organisation that gives money, property or services to another.

Māori authority - an organisation that administers or controls property or income in trust for the benefit of a group of Māori people.

Publicly listed company - a company that is allowed to offer its shares to multiple owners.

Registered charitable entity - an organisation that is registered with the New Zealand Charities Commission and is therefore eligible for some tax exemptions. Being a registered charitable entity is helpful in becoming an IRD-approved donee organisation. To become a registered charitable entity, see the guidance notes on the NZ Charities Commission website.

Schedular payment - a payment for services provided, made to someone other than an employee. An organisation must withhold tax at a rate specific to the type of service.

Tax year - the taxable year for individuals and companies. For most individuals, the tax year is 1st April - 31st March.

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