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Churches must register under Charities Act

One of the most significant implications of the Charities Act is that charitable entities must be registered or risk losing their tax-exempt status.

The legislation came into effect in April 2005 but authorities are still working through the mechanics of how the registration process will be administered.

The Charities Commission, established to oversee the Act, is currently seeking feedback from the charities sector about the registration process, which it hopes to have finalised by March 2006.

The commission will then run workshops around New Zealand to help charities understand and prepare for registration (these are tentatively scheduled for April/May next year).

Actual registration is due to begin mid-way through 2006, although it is expected that organisations will have until at least April 2007 to register before their tax status is affected.

One of the questions to be considered by the Presbyterian Church is whether to register as individual parishes or as a group, such as a presbytery, or under an umbrella national body, says Assembly Executive Secretary the Rev Dr Kerry Enright. Registration requirements mean that there are advantages and disadvantages to each approach, he says.

“For example, advice suggests that if parishes register, this might require all of them to submit a copy of the Book of Order. It seems unlikely that this is what the commission wants, so we need to work through this sort of issue before deciding the best way forward.”

Individual or group registration is just one of the issues that a working party between the Church and the Church Property Trustees will be looking at. Mr Enright recommends that parishes wait on information from the working party before making any decisions about registration.

“There are many potential implications that need to be investigated to ensure that the administrative and compliance costs to the Church as a whole are minimised,” he says.

In the meantime, those who want more information should visit the Charities Commission website at www.charities. govt.nz or call Assembly Office for a copy of A Guide to the Charities Act, which provides useful background information.

<typohead type="3">Registration requirements : </typohead>

To register, charitable organisations will have to:

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Submit a copy of their rules

Provide information about their current and proposed charitable activities

Register officers of the organisation.

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Once registered, organisations will need to:

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File an annual return within six months of balance date

Notify the commission if certain information about their organisation changes.

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