New Videos on the CRA Website
On September 28, 2017, the Canada Revenue Agency (“CRA”) added two new videos to its online charities video gallery. The new videos are part of the “Series: Gifting and Receipting” introduced in late October 2016 and covered in our November 2016 Charity & NFP Law Update. In the first video entitled “Services – Are they receiptable?”, the CRA explains what gifts of service are and provides examples of scenarios where donation receipts cannot be issued for donations of gifts of service. The video explains that gifts of service include donated time, skills and effort and while valuable to a charity, gifts of service do not constitute a transfer of property and therefore, gifts of service are not receiptable by a charity.
In the second video entitled “Services: Website and Software”, the CRA explains that a charity cannot issue a donation receipt for time spent on creating a website for a charity, as this constitutes a gift of service involving donated time, skill and effort (which is not receiptable). However, the CRA further explains a charity can issue a donation receipt for a donation of a software product that is sold in the marketplace, as this constitutes a gift of property. A donation receipt can be issued provided that the receipt reflects the fair market value of the software product, records of which should be retained with the books and records of the charity.