The CRA has recently posted a useful checklist entitled “Goods and services tax/harmonized sales tax (GST/HST) checklist for charities”
Here is part of the CRA checklist dealing with GST for charities:
Goods and services tax/harmonized sales tax (GST/HST) checklist for charities The purpose of this checklist is to help charities understand their GST/HST obligations and entitlements. Any questions regarding the content below should be directed to the CRA Business Windows Section at 1-800-959-5525.
*Determine if your organization is a charity for GST/HST purposes.
A registered charity for income tax purposes is also a charity for GST/HST purposes. However, a charity for GST/HST purposes does not include a public institution (that is, a registered charity that is a school authority, a public college, a university, a hospital authority, or a local authority determined to be a municipality).
*Determine if your charity is making taxable supplies.
The tax status of your charity’s supplies (for example, its sales, leases, rentals, and services) has to be determined. While most of a charity’s supplies are tax-exempt, some of its supplies can be taxable at 5% or 13% (the 13% HST applies to supplies made in the participating provinces of Nova Scotia, New Brunswick, and Newfoundland and Labrador), or zero?rated (taxable at 0%).
*Calculate the small supplier tests.
Small supplier tests are used to determine if your charity must register for GST/HST purposes. Charities have two small supplier tests—the $250,000 gross revenue test and the $50,000 taxable supplies test. Gross revenue includes business income, donations, grants, gifts, property income, and investment income, less any amount considered a capital loss for income tax purposes. The $50,000 taxable supplies test includes worldwide revenues from supplies of goods and services subject to GST/HST, including zero-rated supplies. Do not include sales of capital property, supplies of financial services, or certain payments for goodwill. A charity is considered a small supplier if it has either $250,000 or less in annual gross revenue or not more than $50,000 in annual worldwide taxable supplies.
*Determine if your charity is required to register for GST/HST.
If your charity makes taxable supplies, it may have to register for GST/HST. A charity that is a small supplier does not have to register for GST/HST, but it may do so voluntarily. Charities that are not small suppliers must register for GST/HST.
*Complete GST/HST returns if your charity is registered for GST/HST.
If your charity is registered for GST/HST, ensure that GST/HST returns are filed and calculations are done correctly. Most charities that are registered for GST/HST have to file a return once a year using the “net tax calculation for charities.” A charity that uses this method remits 60% of the GST/HST it collects on most of its taxable supplies, but it can only claim input tax credits for the GST/HST paid on certain purchases.
*Apply for the public service bodies’ rebate.
Regardless of whether your charity is registered for GST/HST, it is generally entitled to claim a 50% public service bodies’ rebate of the GST/HST it paid on its purchases.
Establish eligibility for other GST/HST rebates.
Your charity may be entitled to other GST/HST rebates, including rebates of the GST/HST paid on printed books, expenses related to providing rent?geared?to?income housing, goods and services exported outside of Canada, and goods and services removed from the participating provinces.
*Maintain adequate books and records.
Generally, your charity must keep all records and supporting documents, in English or French, used to determine its GST/HST obligations and entitlements for a period of six years from the end of the year to which the records/documents relate.
More information on charities and the GST/HST can be found in Guide RC4082, GST/HST Information for Charities (http://www.cra-arc.gc.ca/E/pub/gp/rc4082/README.html), and Guide RC4034, GST/HST Public Service Bodies’ Rebate.(http://www.cra-arc.gc.ca/E/pub/gp/rc4034/README.html)
You can find the document at the CRA website at http://www.cra-arc.gc.ca/chrts-gvng/chrts/chcklsts/gsthst-cfc-eng.html
Mark Blumberg is a lawyer at Blumberg Segal LLP in Toronto, Ontario. He can be contacted at or at 416-361-1982 x. 237. To find out more about legal services that Blumbergs provides to Canadian charities and non-profits please visit the Blumbergs’ Non-Profit and Charities page at http://www.blumbergs.ca/non_profit.php or http://www.globalphilanthropy.ca
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.