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Changes to the tax system affecting charitable donations

You will have seen news reports of potential changes to the tax system relating to charitable donations, included as part of Budget 2026. 

This will have implications for some donations made from 1 April 2027. 

Most importantly, the donation tax credit scheme will remain in place for donations to New Zealand charities, such as the Royal New Zealand Ballet. We will continue to provide tax receipts for eligible donations. However, the Government intends to create a new annual cap of $100,000 on donations eligible for the 33.3% tax credit. This will affect donors who give more than $100,000 to charities in the tax year, including potentially some who support the RNZB. 

There are also some further changes in the pipeline, including, from 1 April 2028, the opportunity for donors to claim tax credits on donations at any time during the tax year. Also looking ahead to 2028, there will be the option to return your tax credit direct to the charity you support, which promises to be a helpful way to make your generosity go further, should you so wish.  

We have put together some FAQs for our supporters and encourage you to review these. The changes, if the legislation goes through as proposed, will not come into effect immediately and there will be no changes to donations that you have made or are planning to make during the current tax year. If you have questions or concerns that we can help with, please do get in touch. 

For advice on how any proposed changes may affect your personal circumstances, we encourage you to seek guidance from your financial adviser, accountant, or tax professional.

The RNZB is a charity. Currently, all donations of $5 and above, made to the RNZB from personal supporters, provided they come from personal income, are eligible for tax credits. The RNZB issues tax receipts which you can then submit to IRD to claim your refund, usually around the time that you complete your annual tax return, if you have to do one. All tax receipts are now issued electronically although we can provide a paper copy if requested. 

Only donations are eligible for tax relief. If you receive benefits as a result of making your contribution to the RNZB, then the value of those benefits, for example, the tickets offered to some Dress Circle donors, will be deducted from your receipt. This is why you have to choose to take up your benefits as you make your donation, so that we can provide an accurate receipt. 

Friends’ memberships are not eligible for tax refunds, as all Friends receive benefits, in the form of ticket discounts, in return for their membership fee. It does not matter whether or not you purchase tickets using your Friends’ discount. 

Firstly, there will not be any changes, if the legislation goes through, until the new tax year beginning on 1 April 2027. Tax credits for donations made during the current tax year, will not be affected. The RNZB will continue to issue tax receipts for all eligible donations. 

From 1 April 2027, the maximum value of donations eligible for tax credits in a tax year will be capped at $100,000 per individual, so for a single donor, whether you are giving to one or many charities, the maximum tax credit will be $33,333. 

If you are giving as a couple or a household, and both of you are taxpayers, you will each be eligible for tax refunds up to $33,333. 

The RNZB will continue to issue receipts for all eligible donations. 

All donations make a difference to the RNZB, and our work depends on the support of hundreds of ballet lovers like you. Over the last five years, we have been grateful for an increase in five and six figure gifts, and this has been a wonderful boost for our artistic and community programmes, in particular allowing us to invest in new work. 

We know that many supporters choose to use their tax credits in order to make their generosity go further, either by making larger gifts or giving more frequently, and we are extremely grateful for this.  

If you are planning to make a donation which would be affected by this change, please let us know. We can explore various options, including spreading your giving over multiple years. You may also choose to leave a gift in your will; bequests left to the RNZB Foundation are invaluable for long-term support of the RNZB. 

The RNZB will continue to issue donation receipts throughout the year, so, once the new system comes into effect, from 1 April 2028, you should be able to claim your tax refund more promptly than currently. 

We will keep supporters up to date regarding the proposed streamlining of processes for donating tax refunds direct to charities. This change will also not take effect until 2028, but promises to be a positive option for donors looking to make their giving go further. 

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