Syria Emergency Relief Fund Deadline Extended
On January 7, 2016, the Minister of International Development and La Francophonie, the Honorable Marie-Claude Bibeau, announced that the deadline for individual charitable donations that will be counted towards the government’s relief fund matching program for Syrian refugee relief will be extended to February 29, 2016.
Launched on September 12, 2015, the government’s commitment is to match dollar for dollar donations made by individuals to registered Canadian charities in support of the Syrian refugee relief efforts up to a total of $100 million. As reported in the September 2015 Charity & NFP Law Update, the fund will be administered by the Federal government to its international and Canadian network of humanitarian organizations.
CRA Publishes Webpage providing Information about Assisting Victims of Syrian Conflict
On January 20, 2016, CRA published a new webpage, Assisting people affected by the conflict in Syria, which provides information in a question-and-answer format for registered charities and donors interested in assisting individuals that have been affected by the Syrian conflict. The webpage describes the requirements that must be met for a charity to be able to devote its resources to aiding the refugees from the Syrian conflict. Charities must understand, for instance, that if they wish to assist refugees, this must be stated in their charitable objects; otherwise they will not be in compliance with the Income Tax Act.
Information is also provided for donors, such as resources for finding organizations that that can issue donation receipts and are providing humanitarian assistance. It also provides details about refugee sponsorship and the processes involved with receiving donation receipts.
CRA Updates the T3010 for the New Reporting Requirements
On January 14, 2016, CRA updated the T3010 Registered Charity Information Return to reflect the Budget 2015 proposal that registered charities could invest in limited partnerships without being considered to carry on a business in light of that holding. In order for this to apply to a registered charity there are three conditions, all of which must be met. First, the registered charity must be a limited partner. Second, the charity holdings have to amount to 20% or less of the fair market value of all interests in the limited partnership. Third, the charity has to deal at arm’s length with each general partner of the partnership.
In light of this proposal, charities must now report all holdings in limited partnerships on the T3010. For more information about the Budget 2015 proposals allowing charities to retain holdings in limited partnerships see Charity & NFP Law Bulletin No. 370.
CRA Publishes HST/GST Guidance for NPO’s and Public Service Bodies
CRA has updated two of its informational guides on GST/HST. RC4034 – GST/HST Public Service Bodies’ Rebate and RC4081 – GST/HST Information for Non-Profit Organizations were updated on January 5, 2016, to reflect proposed rebates for the provincial part of the GST/HST announced by Newfoundland and Labrador in April, 2015.
NOTICE292 of the GST/HST notices on the CRA website offers answers to questions pertaining to the eligibility requirements for respective rebates of charities and NPO’s.
MNR Waives Reporting Requirements of Bill C-37
On December 21, 2015, the Minister of National Revenue, the Honorable Diane Lebouthillier (the “Minister”), exercising authority under s. 220(2.1) of the Income Tax Act, announced that the reporting requirements for labour organizations and labour trusts, which came into effect with Bill C-37 An Act to Amend the Income Tax Act (requirements for labour organizations) (the “Act”), would be waived for fiscal periods starting December 31, 2015 until the end of 2016.
The announcement comes in light of the Federal Government’s intention to repeal the Act, which would have required labour organizations and trusts to develop and retain detailed records of their activities beginning December 31, 2015.
CRA Revokes Charitable Status
On December 4, 2015, CRA announced that it has revoked the charitable status of Le Refuge Des Rescapés, effective December 5, 2015. The CRA’s decision was based on an audit of the charity that revealed that it was devoting its resources to support and promote Foncière AgroTerre Inc., a tax shelter donation arrangement. The audit revealed that the charity accepted gifts of property and acted as a receipting agent for the donation arrangement from June 2012 to November 2013. As a result of this arrangement, the Minister found that the organization had improperly receipted over $2 million, causing the organization to fail to meet the requirements of the ITA necessary to maintain charitable registration.
Charities Administrators Convicted for Tax Evasion
On December 8, 2015, two charity administrators, Taiba Djalal and Marcel Fragé (the “directors”), were conditionally sentenced to prison for 12 and 18 months, and fined $15,000 and $19,632 respectively by a Court of Quebec judge.
At the time of the alleged offence, each of the offenders was a director of the charitable organization Société canadienne de développement durable en faveur des femmes dans les pays en voie de développement. CRA’s investigation revealed that the directors, both former CRA employees, made false or deceptive statements when they made up charitable donations that were falsely receipted by the charity. Those receipts were then used to claim personal tax credits to which the directors were not entitled. The credits claimed by Fragé in the years of 2005-2008 amounted to $82,509, and $68, 024 for Djalal in the years of 2005-2007.