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mary.overit · 03-27-2008, 02:51 PM

I've been doing some homework on the tax exemption status of scientology in NZ.

Here is a link to a letter from NZ Inland Revenue (IRD) to the lawyer that assisted scientology.

http://www.cesnur.org/2003/scient_jan.htm

The paragraph about the indebtness of NZ church to mother church is interesting. On the last filed annual return to the incorporated societies (balance sheet for year 2005) the NZ church owed "affiliated organisations" over $1,000,000! Holy crap! That's quite a bit of dosh to owe the American boys! Wonder if IRD would be happy about that. Me thinks it kind of violates the terms of agreement that IRD initially indicated. (www.companies.govt.nz)

"Outstanding debt to Mother Church
"As discussed, I have concerns and reservations about the amount of indebtness on the books at the time the proposed Rules are adopted. Repayment of this debt may well mean the New Zealand Church is applying funds to non charitable purposes."

You may also notice a reluctance by the IRD writer, almost a "we've been pushed into granting this tax exemption by the cleverness of Molloy" feeling.

The good news is something important happened in NZ which may revoke the tax exemption for scientology.

Previously any charitable body wishing to have tax exemptions had to apply to the IRD and IRD would approve (or not) tax exemptions. Scientology was granted this in late 2002. The lawyer they used was Anthony Molloy. Molloy even mentions his handy work on his profile page.

http://www.shortlandchambers.co.nz/b...thonymolloyqc/

In 2005 a new law was passed called the Charities Act. This law allowed for a Charities Commission to be established. ALL groups wishing to conduct charitable activities have to register with the Charities Commission. The Commission thoroughly looks into the group to verify if it is indeed a charitable activity.

The problem for scientology is this. If a group currently has tax exemption status from IRD this will become void if that group fails to or is declined charitable status from this newly formed Charitable Commission. In essence the Charities Commission is going to be the legal body that determines if a group is undertaking charitable activities. They are working with a new legal definition of what is and isn't a charitable group. IRD will just follow their lead to issue tax exemptions. Nice & simple.

All charities have to be registered with the Charities Commission by 01 July 2008. After that cut off point IRD will revoke tax exemption status for any groups not registered with the Commission. The clock is ticking. It is mentioned on the Charities web site that groups should not wait until the last minute to register due to a "first in first served" system they will process applications. There is a long queue to be processed and they make it quite plain that there will be no pushing or shoving one's way to the head of the queue to get applications processed. So no fancy lawyers will help if scientology misses the 01 July cut-off date.

http://www.charities.govt.nz/

The Charities Commission maintains an online database of all registered groups. Scientology, CCHR, etc are NOT currently registered.

There's quite a bit more to all this but some salient points are:

- to maintain tax exemption status all groups performing "charitable" acts MUST be registered by the Charities Commission. Scientology & CCHR are NOT on the new register.
- there will be issues surrounding the amount of monies owed to overseas "mother church" when scientology applies for registration with new commission. An educated guess on my part.
- CCHR is going to struggle to get registered (will need some very fancy language). CCHR has tax exemption status from NZ IRD. What charitable work does CCHR do in the strict legal sense?
- the new Charities Commission has strict rules about filing annual reports, annually. If you look at currently filed annual reports for scientology it is 2 years behind (2005 being the latest filed). Oh deary me!
- there are offences and penalties in the Charities Act 2005 for breaching what is deemed a charitable activity. Time for some serious homework on these.

This is going to be interesting to see if scientology and it's word-smith lawyers can get NZ scientology registered with Charities Commission and hence retain tax exemption status.

Thought you might like a tiny bit of good news.
Have yourselves a great day/night!

03-27-2008, 02:51 PM	#3 (link to here)
mary.overit Member	New law/Commission may alter tax exemption status I've been doing some homework on the tax exemption status of scientology in NZ. Here is a link to a letter from NZ Inland Revenue (IRD) to the lawyer that assisted scientology. http://www.cesnur.org/2003/scient_jan.htm The paragraph about the indebtness of NZ church to mother church is interesting. On the last filed annual return to the incorporated societies (balance sheet for year 2005) the NZ church owed "affiliated organisations" over $1,000,000! Holy crap! That's quite a bit of dosh to owe the American boys! Wonder if IRD would be happy about that. Me thinks it kind of violates the terms of agreement that IRD initially indicated. (www.companies.govt.nz) "Outstanding debt to Mother Church "As discussed, I have concerns and reservations about the amount of indebtness on the books at the time the proposed Rules are adopted. Repayment of this debt may well mean the New Zealand Church is applying funds to non charitable purposes." You may also notice a reluctance by the IRD writer, almost a "we've been pushed into granting this tax exemption by the cleverness of Molloy" feeling. The good news is something important happened in NZ which may revoke the tax exemption for scientology. Previously any charitable body wishing to have tax exemptions had to apply to the IRD and IRD would approve (or not) tax exemptions. Scientology was granted this in late 2002. The lawyer they used was Anthony Molloy. Molloy even mentions his handy work on his profile page. http://www.shortlandchambers.co.nz/b...thonymolloyqc/ In 2005 a new law was passed called the Charities Act. This law allowed for a Charities Commission to be established. ALL groups wishing to conduct charitable activities have to register with the Charities Commission. The Commission thoroughly looks into the group to verify if it is indeed a charitable activity. The problem for scientology is this. If a group currently has tax exemption status from IRD this will become void if that group fails to or is declined charitable status from this newly formed Charitable Commission. In essence the Charities Commission is going to be the legal body that determines if a group is undertaking charitable activities. They are working with a new legal definition of what is and isn't a charitable group. IRD will just follow their lead to issue tax exemptions. Nice & simple. All charities have to be registered with the Charities Commission by 01 July 2008. After that cut off point IRD will revoke tax exemption status for any groups not registered with the Commission. The clock is ticking. It is mentioned on the Charities web site that groups should not wait until the last minute to register due to a "first in first served" system they will process applications. There is a long queue to be processed and they make it quite plain that there will be no pushing or shoving one's way to the head of the queue to get applications processed. So no fancy lawyers will help if scientology misses the 01 July cut-off date. http://www.charities.govt.nz/ The Charities Commission maintains an online database of all registered groups. Scientology, CCHR, etc are NOT currently registered. There's quite a bit more to all this but some salient points are: - to maintain tax exemption status all groups performing "charitable" acts MUST be registered by the Charities Commission. Scientology & CCHR are NOT on the new register. - there will be issues surrounding the amount of monies owed to overseas "mother church" when scientology applies for registration with new commission. An educated guess on my part. - CCHR is going to struggle to get registered (will need some very fancy language). CCHR has tax exemption status from NZ IRD. What charitable work does CCHR do in the strict legal sense? - the new Charities Commission has strict rules about filing annual reports, annually. If you look at currently filed annual reports for scientology it is 2 years behind (2005 being the latest filed). Oh deary me! - there are offences and penalties in the Charities Act 2005 for breaching what is deemed a charitable activity. Time for some serious homework on these. This is going to be interesting to see if scientology and it's word-smith lawyers can get NZ scientology registered with Charities Commission and hence retain tax exemption status. Thought you might like a tiny bit of good news. Have yourselves a great day/night!