By Hayes Knight – 28 April 2010

We often come across payments made by schools described as “koha”. While we fully appreciate the cultural expectations around koha, we are aware that there can be uncertainty as to the taxation implications.

If the payment made is an unconditional gift then there can be no claim for GST and no PAYE need be deducted. However, a question then arises as to why the school should be making a donation.

Any payment made in return for goods and services will be subject to GST if the recipient is registered and may be liable to have PAYE deducted if an employer/employee relationship exists.

A booklet called Payments and Gifts in the Maori Community (IR 278) is available from the Inland Revenue Department.  Check out their website:

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