"Whaowhia te kete mātauranga" – Fill the basket of knowledge.

Māori authorities have specific tax requirements

Specific tax rules have existed for Māori bodies since 1939 and were initially focused on bodies owning Māori land. The implementation of the Te Ture Whenua Māori Act in 1993 – designed to protect Māori land as a cultural treasure and empower Māori landowners to retain, use and develop their whenua (land) – provided legal structures for entities that would qualify for Māori Authority status. In the years since the passing of the Te Ture Whenua Māori Act, these legal structures have increasingly owned a variety of other assets beyond land.

This, along with the increasing role of iwi organisations in the broader economy, saw Parliament introduce the current Māori Authority tax rules with effect from the start of the 2004/05 year. These rules recognise the need for a specific tax framework for Māori organisations that manage Māori assets held in communal ownership, and ensures their tax status aligns with Tikanga Māori, with economic benefits distributed fairly among iwi, hapū and whānau.

In the June 2025 quarter, there were around 1,500 Māori authorities and related businesses, according to Stats NZ.  As the Māori economy continues to boom, this number can only grow.

Advantages to becoming a Māori authority

Becoming a Māori authority has a range of benefits, namely: 

• There is a lower income tax rate of 17.5%.
• Credits attached to distributions that are more than a member's liabilities will be refundable or can be used to cover income tax payable on other income.
• Māori authorities can pay Resident Withholding Tax (RWT) at the 17.5% rate, lower than the standard taxpayer rates of 28%, 30%, 33% or 39%.
• Māori authorities can opt out of the Māori authority rules without needing to wind up and establish another entity

Disadvantages to becoming a Māori authority

Becoming a Māori authority also has disadvantages:

• Māori authorities that are companies can't group losses, amalgamate or consolidate with other companies that aren't Māori authorities.
• When a Māori authority doesn't have a member's IRD number, the 17.5% RWT rate is increased to 33% for any distributions over $200, reduced by any available Māori authority credits of up to 17.5%.
• A Māori authority that elects out and then re-enters later is treated as having disposed of and then re-acquired all its assets at market value.

Eligibility criteria for Māori authority status

To obtain Māori authority status, an entity must elect with Inland Revenue to be treated as such, and meet the following criteria:    

• Have a connection to Māori Land or Assets as defined in Te Ture Whenua Māori Act 1993 or received through a Treaty of Waitangi settlement.
• The entity can be a Trust, Incorporation, Company, Charity or Post-settlement governance entity (PSGE).
• It must operate for the collective benefit of Māori, typically iwi, hapū or whānau, and must distribute income or benefits to members who are Māori individuals or groups.
• The entity must maintain proper governance structures and comply with relevant legislation, including Te Ture Whenua Māori Act 1993, Income Tax Act 2007, Charities Act 2005 (if registered as a charity).

Tax returns and Māori Authority Credit Accounts (MACAs)

Māori Authorities must file an annual IR8 tax return and – as stated earlier – are subject to a special income tax rate of 17.5%.  This rate was reviewed and retained after a recommendation from The Tax Working Group in 2018.

When the Māori authority tax is paid, it then forms a credit in its Māori Authority Credit Account (MACA). This is like the tax treatment of imputation credit accounts for companies. The MACA must be kept annually, from 1 April to 31 March (irrelevant of its balance date), and detail the opening balance, all debit and credit entries, and the closing balance.

These credits can be attached to distributions made to beneficiaries and they can use the credits received to offset their individual tax liability.

Beneficiaries on higher tax rates (30%, 33% and 39%) will need to pay top-up tax (12.5%, 15.5% and 21.5% respectively). This in turn may have broader consequences such as beneficiaries needing to account for provisional tax.  This has become of greater importance in recent years as bracket creep has resulted in more people being subject to the higher individual tax rates.

Other Māori Authority obligations

If a Māori Authority’s turnover from a taxable activity will be more than $60,000 in a 12-month period, it needs to register for GST. It can also choose to register for GST voluntarily if its turnover from a taxable activity is less than $60,000. Note there are also special rules for the GST liability of koha.

If the entity employs staff, it needs to meet employer obligations. It may also need to pay tax when it gives money, goods or services (koha) as reimbursement to someone for providing a service

Any change in members of a Māori authority, as a result of appointing, replacing or removing a trustee of a Māori land trust or shareholder of a company, must be notified to Inland Revenue and supported by documentation from the Māori Land Court.

A Māori Authority may lose its status if it no longer meets the eligibility criteria – especially if it stops managing Māori land or assets, fails to comply with tax obligations or chooses to revoke its election. The revocation applies from the date any of those situations applies or the date that it elects to revoke.

If you have any questions in relation to Māori authorities, contact your Baker Tilly Staples Rodway tax advisor. Our highly qualified and experienced specialists are ready to help you.