Topics: News, What's New from the Charities Directorate of CRA, Canadian Charity Law, Global Giving, Planned Giving and Canadian Charities
Canada has a mechanism to recognize certain foreign universities for purposes of donations. It is probably the most generous tax incentive system of any country in the world. Essentially if you are a degree granting university outside of Canada and you have 2 Canadian students generally studying at your university/college then you can apply to get on a list maintained by the Canada Revenue Agency. Once you are on the list you are considered to be a "qualified donee". That means you can issue Canadian official donation receipts under the Income Tax Act (Canada). WIth such status a Canadian who donates to your prescibed foreign university obtains the same benefits - of between 40 - 70% as if they had donated to a Canadian university.
Foreign universities can apply by themselves but if you want assistance and to understand the process just let us know. The first step is getting the status and the second step if you get donors is properly issuing the official donation receipts.
Just having this mechanism does not ensure that you will get money from Canada. But it certainly makes it a lot more tax effective for Canadian donors. Here is an article that we recently wrote on "Foreign Universities Applying for Prescribed Foreign University Status in Canada". Keep in mind that this great tax incentive generally does not apply to other institutions such as hospitals etc. They need to follow different rules that CRA sets out in their guidance on foreign activities.
The funny thing is that Canadian universities are not entitled to this status. If a Canadian university wishes to issue official donation receipts it has to apply to become a Canadian registered charity and has to comply with all the rules relating to Canadian registered charities. Foreign prescribed universities are not required to comply with all these rules - they just need to ensure that it is a gift under the Income Tax Act and make sure that the official donation receipt that is issued complies with the necessary Canadian requirements. By the way here is the Blumbergs' Receipting Kit from 2013 which may be helpful in terms of understanding receipting from Canada.
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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.