Contributions of Goods or Services to a Non-Profit Organization: Tax Implications

In a January 6, 2020 Technical Interpretation, CRA considered whether a deduction was available to suppliers who contributed in-kind goods or services to an NPO withthe expectation that they would benefit from word of mouth advertising and promotion. Where the supplier is providing goods or services to an NPO in exchange for advertising and/or promotional services, a barter transaction may have occurred. As such, the typical rules for barter transactions would apply. In arm's length…

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Director’s Liability: Helping Out Family

Being a director of a corporation comes with many responsibilities. Failing to exercise due diligence in ensuring source deductions (such as EI, CPP, and income tax) are properly withheld from wages and remitted to CRA may result in a director’s personal liability for the corporation’s outstanding amount. A June 12, 2018 Tax Court of Canada case examined whether an individual who set up a corporation (along with a bank account) for his brother to operate…

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Donation Receipts: How Complete is Complete?

Charities should ensure that any donation receipts issued are fully compliant with the tax rules. Failure to do so may result in the donor being denied a charitable donation if reviewed by CRA. This could cause operational and goodwill problems for the charity. Receipts for cash gifts must have the following: a statement that it is an official receipt for income tax purposes; the name and address of the charity as on file with CRA;…

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Support of Refugees: Tax and Filing Requirements

Two Technical Interpretations (May 26 and March 3, 2017) considered whether support provided to a refugee would be required to be reported on a Form T5007, Statement of Benefits. Essentially, the CRA considered whether the support would constitute “social assistance” which would require a T5007. If the amount is not considered “social assistance”, no T5007 would be required. CRA opined that amounts would be considered “social assistance” if provided by a government or government agency,…

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Return of a Gifted Property: Donors and Charities Beware!

In a March 31, 2017 Technical Interpretation, CRA commented on the tax consequences of a charity returning a donated property to the donor. This could occur, for example, when a donation was made specifically for a project that had been halted.

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