This module looks at the basic rule of De Minimis. The module answers the questions: What is De Minimis? What are the rules? Can you give me an example of applying the De Minimis rule? Are there exceptions to the De Minimis rule? What are the exceptions?

Introduction

This module looks at the basic rule of De Minimis.

• What is De Minimis?
• What are the rules?
• Can you give me an example of applying the De Minimis rule?
• Are there exceptions to the De Minimis rule?
• What are the exceptions?

De Minimis Threshold

The De Minimis rule allows a donor to receive an official donation receipt for the full amount of their donation, when the advantage is too minimal to affect the value of the gift.

The rule states that if the total advantage does not exceed $75 or 10 per cent of the amount of the gift (whichever is less), the advantage is not included in the calculation of the eligible amount on the receipt.

Note:  In the case of fundraising events, the object of the event is not included in determining the De Minimis.

Example

A museum gives small tokens of appreciation to acknowledge donations of certain amounts:

• For a $150 donation, donors receive a calendar worth $14
• For a $200 donation, donors receive a tote bag worth $25
• For a $1,000 donation, donors receive a pen worth $100                                                                             

Can the museum issue donation receipts for these gifts?

• The $14 calendar is worth less than the lesser of $75 or $15 (10% of the $150 donation). The advantage is too small (de minimis).

An official receipt can be issued for $150

• The $25 tote bag is worth more than the lesser of $75 or $20 (10% of the $200 donation) and must be considered an advantage.

An official receipt can be issued for $175.

• The $100 pen is worth more than the lesser of $75 or $100 (10% of the $1,000 donation) and must be considered an advantage.

An official receipt can be issued for $900.

Exception to De Minimis

The De Minimis rule does not apply to cash or near cash equivalents such as redeemable gift certificates, coupons, or vouchers.

This means that any advantages are to be included in the total amount of the advantages, and deducted from the value of the gift, to determine the eligible amount of the tax receipt.

Notice

Information in this module is provided for general educational purposes and not as legal or accounting advice. Consult a lawyer or accountant for professional advice.

Information is accurate as of 2019.

For changes after this date, consult Canada Revenue Agency.