You may not be aware that proposed changes to New Zealand’s Incorporated Societies legislation are going through Parliament at the moment. Here is an update on the changes.
In May, the Government agreed to make a number of proposed changes to the Incorporated Societies Act. The Act was designed to provide guidance to New Zealanders who run societies, but at more than 100 years old the original legislation is badly out of date.
The proposed changes will mean that Incorporated Societies not registered as charities will be required to report using XRB standards when they meet one or more of the following criteria:
- Make annual payments of $10,000 or more; and/or
- Hold assets valued at $30,000 or more; and/or
- Have “donee status” under the Income Tax Act 2007.
Incorporated Societies not registered as charities will require a mandatory audit if they meet one of the following criteria:
- Have annual expenditure over $2 million; or
- Have assets worth more than $4 million.
Note that a registered charity which is also an Incorporated Society is already required to have a mandatory audit when its annual expenditure is over $1 million, and is required to have a mandatory review when annual expenditure is over $500,000. Our recent article “The Difference Between Audits, Reviews and Agreed-Upon Procedure Engagements” explains in more detail the benefits each of these two procedures provide.
The Incorporated Societies Bill review is expected to be introduced to Parliament later this year. For more information please visit the Ministry of Business, Innovation & Employment website, or contact a UHY Haines Norton Director.