Registered Charities - The Basics

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Becoming a Registered Charity

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The QST and the GST/HST: How They Apply to Charities

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==en== This brochure provides information on various subjects, including taxable and exempt sales, tax rebates, the simplified net tax calculation method, registration for the GST and the QST, input tax credits (ITCs) and input tax refunds (ITRs). ==fr== Cette brochure fournit des informations, notamment, sur les ventes exonérées, les ventes taxables, le remboursement partiel des taxes, la méthode du calcul simplifié de la taxe nette, l'inscription aux fichiers des taxes ainsi que les crédits de taxe sur les intrants (CTI) et les remboursements de la taxe sur les intrants (RTI).

RC10. How can a registered charity carry out its charitable purpose?

RC10. How can a registered charity carry out its charitable purpose?

A registered charity can make grants or gifts to other qualified donees or it can carry out its own activities or purposes as set out in its incorporation documents.
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D7. When determining the fair market value of an item should we include the GST/ HST?

D7. When determining the fair market value of an item should a registered charity include the GST/HST?

No.

The fair market value of an item should not include taxes paid on purchasing the item. Taxes are a cost incurred by the purchaser and are payable to the Crown. The seller merely acts as an agent of the Crown in collecting the taxes

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F22. How do we allocate expenses of an activity that includes fundraising?

F22. How do we allocate expenses of an activity that include fundraising?


Short Answer

A charity must satisfy one of two tests before determining how (if any) of the expenditures relating to an activity may be considered to have both fundraising and charitable components. These tests are:

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F21. Does the CRA compare fundraising expenses to the amount we raised through fundraising?

F21. Does the CRA compare fundraising expenses to the amount we raised through fundraising?


Short answer

Yes. The ratio of fundraising expenses to fundraising revenues is one of the factors that the Canada Revenue Agency (CRA) reviews.

This CRA grid guides them in determining when additional information on fundraising costs is needed.

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F20. Why does a charity have to make a distinction between its fundraising activities and its charitable program activities?

F20. Why does a charity have to make a distinction between its fundraising activities and its charitable program activities?

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