Section CW 62B — Income Tax Act 2007: Voluntary activities

CW 62B Voluntary activities Exempt income (1) When a volunteer, in undertaking a voluntary activity, derives an amount that is a reimbursement payment to cover actual expenses incurred by them, the amount is exempt income of the volunteer. Estimated expenditure (2) For the purposes of subsection (1)— (a) a person may make a reasonable estimate of the amount of expenditure likely to be incurred by the volunteer for which reimbursement is payable; and (b) the amount estimated is treated as if it were the amount incurred. Payments partly reimbursement and partly honorarium (3) If the person paying the amount to the volunteer makes a payment to them that is only partly a reimbursement of expenses, the person must identify the portion of the amount that is the reimbursement, and treat the remainder as an honorarium, being a schedular payment to which the PAYE rules apply. Who is a volunteer? (4) For the purposes of this section, a volunteer means a person who freely undertakes an activity in New Zealand— (a) chosen either by themselves or by a group of which they are a member; and (b) that provides a benefit to a community or another person; and (c) for which there is no purpose or intention of private pecuniary profit for the person. Honoraria (5) For the purposes of this section, an honorarium means an amount that a person receives for providing services that— (a) is paid at a rate that is less than the market rate for providing the services; and (b) is an amount for which, in the normal course, no payment is fixed for the services provided. Nature of reimbursement payment (6) For the purposes of this section, it does not matter whether— (a) an amount of a reimbursement payment is paid in 1 sum or not: (b) the amount is paid during an income year or at the end of an income year. Relationship with section RD 8(3) (7) A determination made by the Commissioner under section RD 8(3) (Schedular payments) may apply to modify an amount of expenditure under this section. Defined in this Act: amount , exempt income , honorarium , income year , New Zealand , pay , PAYE rules , schedular payment , volunteer Section CW 62B: inserted (with effect on 1 April 2009), on 6 October 2009, by section 50(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section CW 62B(5): amended, on 7 September 2010 (applying for the 2009–10 and later income years), by section 15(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).