On 26 June 2018, Inland Revenue released two Questions We’ve Been Asked (QWBA) explaining when a parent’s payment to a school will be a gift so that the school can issue a donation tax receipt to the parent. Also released was a public ruling relating to goods and services tax and payments made by parents to state and state integrated schools.

Public ruling BR Pub 18/06: Goods and services tax — payments made by parents to state and state integrated schools

Goods and services tax (GST) is not chargeable on payments made by parents to the board of trustees of a state or state integrated school where the payments are made to assist the school with the cost of delivering education services which the student has a statutory entitlement to receive free of charge. GST is chargeable on payments made for supplies of other goods or services that are not integral to the supply of education to which the student has a statutory entitlement, where that supply is conditional on the payment being made. The ruling applies for the period beginning 21 June 2018 and ending on 20 June 2023.

The ruling is a reissue of BR Pub 14/06 which expired on 20 June 2018. It is substantially the same as BR Pub 14/06 but some parts have been rewritten to improve readability, and legislative changes have been included. The ruling refers to Circular 2018/01 Payments by parents of students in schools (Ministry of Education, 2018).

QB 18/10: Income tax — state schools and donation tax credits

Payments by parents to state schools are gifts for donation tax credit purposes where the payment is voluntary and is a payment to the school:

  • to assist generally with funding its costs, including the cost of delivery of the school’s curriculum
  • for a specific purpose or project to benefit the school as a whole where no material benefit or advantage is obtained in return for making the payment, or
  • to assist with the school’s cost of delivering individual subjects or activities forming part of the school’s curriculum and in which the student may participate regardless of whether any payment is made.

QB 18/11: Income tax — state integrated schools and donation tax credits

Payments by parents to state integrated schools are gifts for donation tax credit purposes where the payment is voluntary and is a payment to:

  • the board of trustees to assist generally with funding its costs, including the cost of delivery of the school’s curriculum
  • the board of trustees or a qualifying proprietor for a specific purpose or project to benefit the school as a whole where no material benefit or advantage is obtained in return for making the payment
  • the board of trustees to assist with the school’s cost of delivering individual subjects or activities forming part of the school’s curriculum and in which the student may participate regardless of whether any payment is made, or
  • a qualifying proprietor to assist the proprietor with its cost of supporting the delivery of the school’s curriculum with special character.