Topics: What's New from the Charities Directorate of CRA, Canadian Charity Law, Receipting by Canadian Registered Charities, Planned Giving and Canadian Charities, Canadian Charity Statistics
As a result of the 2016 Quebec Budget, Canadian registered charities are no longer required to complete a separate charitable registration in Quebec in order to be able to issue tax receipts to donors in Quebec.
Previously, Canadian registered charities registered under the Income Tax Act (Canada) with the Canada Revenue Agency ('CRA') could not issue tax receipts in Quebec unless the charity arranged to file the requisite documents required under the Taxation Act (Quebec) with Revenu Quebec. The 2016 Quebec budget has changed these rules. As of January 1, 2016, a charity that is registered with the CRA will be 'deemed' to be registered in Quebec as well and separate registration will no longer be required. The only stipulation is that Revenu Quebec still has the ability to modify, annul or revoke this charitable status in Quebec. Also, any donations that were made prior to January 1, 2016 to an entity that was an approved Canadian registered charity at the time of the donation are also deemed to be registered in Quebec.
Here is the relevant excerpt from the 2016 Quebec budget:
3.9 Simplification of the registration procedure for charities
For the purposes of Québec tax legislation, a registered charity at a particular time is any charitable organization, any private foundation or any public foundation that is registered or deemed to be registered at that time as a charitable organization, a private foundation or a public foundation with the Minister. To that end, the tax regulations provide that, subject to the Minister’s power to refuse or revoke a registration or modify a designation, any charitable organization, any private foundation or any public foundation that possesses valid registration as such under the Income Tax Act and has provided to the Minister, within 30 days following confirmation of registration as such under federal tax legislation, a true copy of the documents filed in support of the application for registration and reasonable proof of registration is also deemed to be registered with the Minister as a charitable organization, a private foundation or a public foundation, as applicable. Currently, the formalities put in place by Québec have no equivalent elsewhere in Canada. For the purposes of the tax systems of the other provinces, charitable organizations, private foundations and public foundations that are registered charities under federal fiscal legislation have no formality to accomplish in order for the receipts they issue to be recognized for the purposes of calculating tax relief for donations, regardless of the province in which the exercise their activities.
The receipts issued by a charity registered under the federal tax legislation that exercises all its activities in Québec are therefore automatically recognized for the purposes of the other provincial tax systems. Accordingly, to ensure equivalent treatment, the tax regulations will be amended to stipulate that, subject to the Minister’s power to refuse, cancel, or revoke a registration or to modify a designation, a charitable organization, a private foundation, a public foundation or a division—a branch, section, parish, congregation or other division—of a charitable organization, private foundation or public foundation that possesses valid registration as a charitable organization, a private foundation or a public foundation under federal tax legislation will be deemed to also be registered as such with the Minister. This amendment will apply as of January 1, 2016. In addition, donations made before January 1, 2016 to an organization that, at the time of the donation, was a charity registered for the purposes of the federal tax legislation will be, for the purposes of the deduction for gifts or the non-refundable tax credit for gifts granted by the Québec tax system, deemed to have been made to a registered charity, unless, at that time, the Minister had refused to register it as a charitable organization, private foundation or public foundation or had cancelled or revoked its registration.
If a Canadian registered charity has received donations from individuals that are resident in Quebec during their fiscal year, or is carrying on activities in Quebec, the charity may still be required to file the annual return (TP-985.22) with Revenu Quebec within six months of the end of its fiscal year.
More information on this issue can be found on Revenu Quebec's website and we anticipate there will be further updates in the near future at http://www.revenuquebec.ca/en/salle-de-presse/nouvelles-fiscales/2016/2016-05-26.aspx
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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.