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Canada Revenue Agency News

Excise and GST/HST News on Sponsorships 

In the most recent Excise and GST/HST News (No. 93), CRA included a section on sponsorships and public sector bodies.  It describes how the GST/HST affects public sector bodies that receive sponsorships from businesses in exchange for property or services. Depending on the benefit to the sponsor, such sponsorships may be subject to GST/HST. The article discusses the conditions under section 135 of the Excise Tax Act where a supply made in exchange for sponsorship funds is not subject to GST/HST. To read the full article, see:

National Philanthropy Day

On November 14, 2014, the Minister of National Revenue, the Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P., issued a news release to celebrate National Philanthropy Day on November 15, 2014. The news release emphasized “the important role charities play in communities across the country” and encouraged taxpayers to consider donating. The Minister focused on the First-Time Donor’s Super Credit, revealing that over 95,000 individual taxpayers have used the First-Time Donor’s Super Credit to claim in excess of 20 million dollars in charitable donations since July of this year. The news release also included a reminder that donors should consult the Charities Listings on CRA’s website to verify if an organization is eligible to issue official receipts for donations. The full text of the news release is online here: 

Alert on Gifting Tax Shelters

On November 20, 2014, CRA issued a Tax Alert that warns taxpayers about the consequences of participating in gifting tax shelter schemes. The alert confirms CRA will continue to hold back on processing tax returns for the 2014 tax year, as it did in 2012 and 2013, where taxpayers have claimed a donation tax credit under a tax shelter arrangement. Returns will only be processed after the tax shelter has been audited unless a taxpayer removes the claim from the return. The alert also cautions taxpayers that audits can take as long as two years to complete and that all gifting tax shelters will be audited. As no tax shelter has so far complied with Canadian tax law, CRA reminds taxpayers that since 2013 they must pay 50% of taxes potentially owed even if they choose to object to the notice of assessment.

The Tax Alert can be found at: 

This article originally appeared in Carters Charity Law Update and is reprinted with permission. Read the full version here, 

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