Tax Treatment Of Māori Authorities

Are you a trustee of a Māori land trust? Are you a committee or management member of a Māori incorporation or a governor of another entity subject to Te Ture Whenua Māori Act 1993? Have you considered applying to Inland Revenue Department to be treated as a Māori authority for tax purposes?

Like all other taxpayers, Māori authorities are subject to income tax laws. It is important that the correct tax is being paid on any income received by your entity. If your entity does qualify as a Māori authority for tax purposes the special tax rate is 17.5%.

In order to be eligible for Māori authority status, your organisation must meet certain criteria. Below are some examples of who will be eligible to become a Māori authority:

• The trustees of a Māori land trust established under Te Ture Whenua Māori Act 1993;
  
  
• A company that owns land which is subject to Te Ture Whenua Māori Act 1993 which includes Māori Incorporations;
  
  
• A Māori Trust Board (as defined under section 2 of the Māori Trust Boards Act 1955);
  
  
• The trustees of a Trust that is recognised by Te Ohu Kaimoana Trustee Limited as a mandated iwi organisation under section13(1) of the Māori Fisheries Act 2004; and
  
  
• The trustees of a Trust who on behalf of Māori claimants receive and manage assets that are transferred by the Crown as part of a Treaty of Waitangi settlement i.e. a recognised post settlement governance entity.

The Trusts Act 2019 (“the Act”) outlines the core principles and default rules for trusts, which also applies to Māori land trusts established under Te Ture Whenua Māori Act 1993 (such as Whānau Trusts, Ahu Whenua Trusts and Kaitiaki Trusts).

The Act sets out two types of trustee duties:

• Mandatory duties – these must be performed by the trustee and cannot be changed or avoided by the terms of the Trust Order/Deed. Examples of these duties include that trustees must know the terms of the Trust Deed/Order and to act honestly and in good faith; and
  
  
• Default duties – these must be performed by the trustee unless they have been changed or excluded in the terms of the Trust Order/Deed. Examples include the duty not to exercise power for the trustees’ own benefit and the duty to avoid conflicts of interest.

If you are eligible for Māori authority status there are certain responsibilities attached to this, including specific record keeping practices and filing particular end-of-year returns information (such as an income tax return, an Annual Māori authority credit account return and a Māori authority distribution statement).

If you are interested in discussing the advantages, disadvantages or responsibilities of becoming a Māori authority for tax purposes or require assistance with your application, please contact our Te Tira Hau Ture (Māori legal services) team.