Greenpeace New Zealand is fighting to gain charitable status after it was turned down by the Charities Commission for advocating peace and indirectly encouraging illegal activity.

Greenpeace executive director Bunny McDiarmid said the environmental group had appealed against the commission's decision to the High Court. The case would be heard in August or September.

"We think it's worthwhile challenging this decision," she said. "I think it's an interesting debate that societies should have . . . around what is a charity and whether the law from 100 years ago is still relevant today."

The rejection means Greenpeace could lose income tax exemption, which is granted only to registered charities. People would still be able to make tax-free donations to the organisation.

Ms McDiarmid said Greenpeace still had income tax exemption pending a court decision, but losing the status was not why it was challenging the commission's ruling. "That doesn't make much difference because we're not a business."

The commission's decision in April found Greenpeace's promotion of "disarmament and peace" was pushed in a political, rather than educational, way.

Greenpeace's aim of international nuclear disarmament would require law changes in many countries, making it a political objective not appropriate for a charity.

Although Greenpeace did not directly advocate illegal acts, its advocacy of "non-violent direct action" had involved Greenpeace members acting illegally, the commission said.

One incident was cited in which 14 Greenpeace activists were arrested for illegally boarding a boat while protesting against the importation of palm kernels for stock feed.

The decision followed more than a year of dispute between the commission and Greenpeace, which tried to make changes to gain charitable status.

Greenpeace argued that its core purpose was charitable, pointing out that eliminating all weapons of mass destruction would have obvious community benefits.

Any "non-charitable" advocacy was incidental to its main charitable objectives of non-political environmental protection and education, Greenpeace said.

Charities Commission chief executive Trevor Garrett said organisations that dabbled in political advocacy but were primarily community-focused, such as Plunket, were safe. But those with an overt political role were not charities.

The commission was set up in 2005 to rein in uncertainty over charitable status.

Previously, organisations had simply declared themselves charitable and reaped the tax benefits, providing they were not tax-audited.