Apr 2018 Charity & NFP Law Update
Guide RC4082, GST/HST Information for Charities Updated
On April 12, 2018, the CRA updated Guide RC4082, GST/HST Information for Charities to reflect changes to the GST/HST rebate for tour packages. Guide RC4082 discusses common tax situations for charities, and outlines the calculation of net tax remittances for charities that are GST/HST registrants, stating that 60% of the total of the GST/HST adjustments, including the GST/HST rebate for short-term accommodation in tour packages, can be included in the calculation. As proposed in the 2017 Federal Budget, the GST/HST rebate available to non-residents for the Canadian accommodation portion of eligible tour packages under the Foreign Convention and Tour Incentive Program was repealed in relation to accommodations supplied after March 22, 2017. In this regard, Guide RC4082 has been updated to specify that short-term accommodation in tour packages can be included in the GST/HST adjustment calculation if such tour packages were purchased on or before March 22, 2017.
The update to Guide RC4082 also clarified that while supplies of paid parking spaces at public hospitals made by charities or public sector bodies to patients, visitors, and hospital volunteers are exempt from GST/HST, parking supplied to hospital staff and medical professionals is generally taxable.
New CRA Video and Webpage on Issuing Donation Receipts for Golf Tournament Fundraisers
With the golf season about to begin, charities that host golf tournaments will be pleased to know that on April 24, 2018, the CRA added a new video to its online charities video gallery on golf tournament fundraisers. In this new video, the CRA provides guidance to charities hosting golf tournament fundraisers with respect to issuing donation receipts. The video explains the process for charities in three-steps. The first step is for the charity to identify and determine the fair market value of any benefit, which the CRA refers to as an advantage, such as door prizes, a round of golf, the use of a golf cart, dinner, refreshments, and other small value items (e.g. t-shirts or hats), that a participant/donor will receive in exchange for the registration fee to participate in the golf tournament. The video clarifies that it is not an advantage to include “a chance to win a prize for a hole-in-one” which is deemed to be too small and can be ignored.
The second step is to determine the donative intent of the participant/donor, i.e. if the value of the advantage is more than 80% of the registration fee, the donor will be considered not to have made a gift. The third step is to determine the eligible amount of the donation for receipting purposes, which is done by subtracting all advantages received by each participant/donor from the amount of their registration fee.
The CRA also has a new webpage with additional information for charities hosting golf tournaments. The webpage contains a graphic educational tool as well as general information about how to determine the value of certain advantages, such as cart rentals, meals, complimentary items, and raffle tickets. It also provides an example illustrating how to calculate the eligible amount of the donation for which a receipt may be issued.