CRA in this letter to a charity outlines their position that a charity can issue official donation receipts for amounts when fixed amounts are paid by persons participating in an organized orchestra trip as long as all advantages are subtracted from the value of the donation receipt.  As well where annual membership dues are paid by members towards the general operations of the Orchestra they can receive a official donation receipt minus the advantage.  I think at some point CRA should develop a more robust position on when it is appropriate for a charity to be paying for travel expenses.  This is an area of concern – we saw Universal Aide but there are a lot more complicated situations were charities are issuing donation receipts for expensive international travel and it is more in the grey zone.  When in doubt, either as to the amount of an advantage or the appropriateness of issuing a tax receipt, a charity should not issue a tax receipt or contact CRA and get their advice.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu’exact au moment émis, peut ne pas représenter la position actuelle de l’ARC.

PRINCIPAL ISSUES: Can the Orchestra issue donation receipts for (1) fixed amounts paid by persons participating in an organized trip the Orchestra made to XXXXXXXXXX (the amount is meant to cover all expenses relating to the trip); and (2) for membership dues paid towards the general operations of the Orchestra.

POSITION:  (1) A receipt can be issued for the “eligible’ amount of the gift, if any. (2) A receipt can be issued for the “eligible’ amount of the gift.

REASONS:  Under the proposed split-receipting rules, any benefits to the donors or to persons with whom the donor does not deal at arm’s length would result in an advantage under subsection 248(32) and would reduce the amount of the eligible gift.

2008-029031 XXXXXXXX   Sylvie Danis (613) 957-3496

April 30, 2009


Re:  Charitable Donation Receipts

This is in response to your request for guidance with respect to the issuance of charitable donation receipts in two types of situations:

1)  Where fixed amounts are paid by persons participating in an organized trip the Orchestra made to XXXXXXXXXX (the amount is meant to cover all expenses relating to the trip); and

2)  Where annual membership dues are paid by members towards the general operations of the Orchestra.

Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advance income Tax Rulings, dated May 17, 2002.  Where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office.  However, we offer the following general comments.

Section 118.1 of the Income Tax Act (the “Act”) provides that individual taxpayers may claim a credit against taxes payable, within specified limits, for an eligible amount of a gift made to a qualified donee (which includes a registered charity), if supported by an official receipt. 

The term “gift” is not defined in the Act and therefore assumes its common law meaning.  Under common law, a bona fide gift is a voluntary transfer of property from a donor, who must freely dispose of his or her property given with no right, privilege, material benefit or advantage conferred on the donor or any person designated by the donor in exchange for the donor making the gift. 

Proposed subsections 248(30) to (32) of the Act allow for the recognition of a gift for tax purposes in certain situations where there is expectation by the donor that in return for the contribution, a benefit of any kind will be provided to the donor or a person designated by the donor.  However, pursuant to proposed subsection 248(31) of the Act, the eligible amount of a gift is the excess of the fair market value of the property transferred to a qualified donee over the amount of the advantage provided to a donor. 

In your letter to us, you indicated the purpose of the trip was to “perform XXXXXXXXXX concerts in the XXXXXXXXXX , and to provide an opportunity for the Orchestra to visit XXXXXXXXXX , and to generally tour XXXXXXXXXX and the surrounding area.”  It would appear that the donors obtained benefits in consideration for the monetary contribution which would result in an advantage.

The amount of the advantage under proposed subsection 248(32) of the Act is generally the fair market value, at the time the gift is made of any property, service, compensation or other benefit received, or expected to be received in the future, as partial consideration for, or in gratitude for the gift.  Note that if the value of the advantage exceeds 80% of the fair market value of the transferred property, there will not be an eligible amount of a gift unless the transferor of the property establishes to the satisfaction of the Minister of National Revenue that the transfer was made with the intention to make a gift. 

It is the responsibility of the charity to determine the value of the advantage provided.  As noted in Income Tax Technical News (ITTN) No.26 if the value of an advantage cannot be reasonably ascertained, no charitable tax deduction or credit will be allowed.  In this regard, the donee will be required to identify the advantage and the amount thereof on any receipt provided to the donor in accordance with the proposed amendments to section 3501 of the Income Tax Regulations.

Finally, our views with respect to the membership fees are outlined in ITTN No.  26:

Whether or not there is an eligible amount associated with the payment of membership fees or other amount to a registered charity of which an individual is a member will be determined on the basis of whether the membership fee or other amount exceeds the amount of the advantage.  If the amount of the advantage is 80% or less of the payment to the charity, a tax receipt may be issued for the eligible amount.

If the donor receives no advantage in respect of the membership fees paid to the charity, the eligible amount of the gift will equal the amount of the monetary contribution to the charity.

We trust the above comments are of assistance.  However, as stated in paragraph 22 of Information Circular 70-6R4, the above comments do not constitute an income tax ruling and accordingly are not binding on the Canada Revenue Agency in respect of any particular situation.

Yours truly,

F.  Lee Workman
Charitable and Financial Institutions Sectors
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch


Mark Blumberg is a lawyer at Blumberg Segal LLP in Toronto, Ontario.  He can be contacted at or at 416-361-1982. To find out more about legal services that Blumbergs provides to Canadian charities and non-profits please visit or

This article is for information purposes only. It is not intended to be legal advice. You should not act or abstain from acting based upon such information without first consulting a legal professional.