Education and Skills

The Income Tax Act 2058 provides reduced tax treatment for community schools and certain non-profit education institutions meeting specified criteria. Private for-profit schools and colleges are generally subject to corporate income tax, though specific exemptions and reduced rates may apply for institutions registered under particular structures. The structural choice between for-profit company, trust, and other forms drives meaningfully different tax outcomes and should be made deliberately with current law in view.

Tuition and educational services are generally VAT-exempt under the VAT Act 2052. However, ancillary services often fall outside the exemption — hostel and food services, transport, optional extra-curricular programmes, sale of uniforms and materials, and corporate training. Edtech subscriptions delivered electronically have specific treatment under VAT rules on digital services. Education institutions commonly under-report VAT on non-exempt activities; this is an IRD audit priority.

Private schools often operate as cooperatives or as private limited companies. Colleges affiliated to universities or to CTEVT typically operate as either companies or trusts/educational guthi structures. Each structure has different tax, governance, and exit implications. The choice is harder to change once enrolled students and capital structures are in place, so it's worth getting right at inception.

Under NFRS 15, edtech revenue typically follows the over-time pattern aligned to course access duration. Annual subscriptions paid upfront are deferred and recognised across the access period; one-off course purchases with unlimited access are recognised when access is granted unless there is a substantive ongoing service obligation. Multi-element arrangements (course plus mentorship plus certification) require allocation across performance obligations.