Education centres

If you are involved in running an education centre, you have a number of tax responsibilities. The term education centre includes all organisations providing educational services, including:

universities
schools
kindergartens
kōhanga reo
creches.

Types of education centres

There are 4 types of education centres:

schools operated by boards of trustees
charities
not-for-profits
businesses.

Schools operated by boards of trustees

These include state primary, intermediate and secondary schools, private integrated schools, composite schools, Kura Kaupapa Māori schools, and special education schools. These schools do not have to pay income tax under the Education and Training Act 2020, but may have to pay other taxes, such as GST and fringe benefit tax (FBT).

Charities

These are centres that meet the requirements to be a charity. Charities generally do not have to pay income tax or fringe benefit tax, but may have to pay other taxes such as GST.

Tax exemptions for charities

Not-for-profits

These are generally community-based organisations with rules that stop members from receiving any benefits. Some non-profit bodies are childcare, playcentre, kōhanga reo, and community associations that are not registered charities.

Not-for-profits can apply not to pay income tax on the first $1,000 of their income. However, they may still have to pay GST or other taxes.

Pay less tax with a not-for-profit income deduction

Businesses

If a centre is run to make a profit for its owners, it will need to pay income tax on its income and may also have to pay GST or other taxes. Business development and training organisations may qualify as businesses.