CRA recently released a letter which discusses whether a Community Contribution Company (“C3”) incorporated in the province of British Columbia that elects not to distribute any of its profits to its shareholders, but donates all of the profits to a charitable organization, will qualify for exemption from tax under par. 149(1)(l). CRA had the following comments:
CRA determined that the C3, regardless of how the funds would be distributed, operates as a for-profit business corporation and therefore cannot qualify as a non-profit, which must be organized and operated exclusively for purposes other than profit. The C3 was determined to be a taxable corporation and not eligible for the exemption under par. 149(1)(l).
Here is a copy of the full CRA letter.
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