Reclassification of Charities Amendment Bill

The Parliament of New Zealand enacts as follows:

1. Title

This Act is the Reclassification of Charities Amendment Act 2021.

2. Commencement

This Act comes into force on the day after the date on which it receives the Royal assent.

3. Principal Act

This Act amends the Charities Act 2005 (the principal Act).

4. Section 5 amended

In section 5 (1) replace,

"In this Act, unless the context otherwise requires, charitable purpose includes every charitable purpose, whether it relates to the relief of poverty, the advancement of education or religion, or any other matter beneficial to the community."

with

"In this Act, unless the context otherwise requires, charitable purpose includes every proven charitable purpose, whether it relates to the relief of poverty, the advancement of education, or any other matter proven beneficial to the community."

General Policy Statement

This piece of legislation removes the ability for those who use religion as an excuse for tax breaks, without meaningful beneficial service to the community to use a loophole in the definition of a charity for tax purposes. The legislation also adds in the provision that for the purpose of the act, that an onus on proof to be recognised as a charity.