We had a chat to our accountant and here’s what they had to say:
“There are two different ways donations are treated and it depends on the size of the company’s shareholding.
Firstly, ‘close companies’ are defined in the income tax act here. Basically, if a company has 5 or fewer people or other companies owning the majority of the company, it’s a ‘close company’.
For these close companies, they can claim the full amount of the donations they’ve made up to the amount of their net profit for the year. E.g. if they have made a net profit of $1,000 and made donations of $1,100, they would be able to claim the donations up to $1,000, making their net profit for the year after donations nil.
For all other companies, they can claim a limited deduction for donations or gifts made throughout the year. The limitation is 5% of their net profit before the donations were made. E.g. if a company has a net profit of $1,000 they will be able to claim donations up to the value of $50 as tax deductible expenses for the year. If you’re interested in knowing more, the income tax act section is DB 41."
We're definitely not the people to give advice on this so if you need some more clarity, we’d highly recommend having a chat to your accountant.
Otherwise, we can tell you a couple of things for certain; 1) One Percent Collective Trust is a registered charity in New Zealand with donee status, and 2) we’ll do all we can to make things easier by sending you one donation receipt to cover all your business’ donating through us.