New Videos on the CRA Website
On July 20, 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 this new release, the CRA provides guidance to charities and other qualified donees with respect to issuing donation receipts for items donated and funds raised at auctions. The first video explains when and how to issue donation receipts to people who donate items they have made, such as food or even a five course meal, covers whether the value of the skill or the materials involved can be receipted, and points out that a winning bid at an auction can’t determine fair market value. The second video provides guidance on how to calculate donor advantage and the 80% rule at auctions, highlighting the importance of displaying the fair market value of all items offered at auction before any bidding is allowed. This is because the bidder needs to know when he or she is making a gift beyond the value of the item received and a charity needs to know the fair market value of the donation (bid) and the advantage (item) in order to give a receipt. A receipt may only be issued if the advantage is 80% or less than the bid.
Update to HST/GST Info Sheet GI-121
On August 15, 2017, the CRA updated its GST/HST info sheet GI-121 from August 2011. This info sheet provides a guide for public service bodies (“PSBs”) to determine their residency status and to claim the PSB rebate on the provincial portion of the HST. It complements Guide RC4034, GST/HST Public Service Bodies’ Rebate. The update eliminates the previous worksheet, but provides a new version of the questionnaire for determining whether a PSB has a permanent establishment in a province.
CRA Courtesy Calls to Charities
The CRA announced earlier this month that it has started making automated courtesy calls to remind registered charities to file their completed information return in time. A complete return is due within six months after the end of the charity’s fiscal year. For privacy reasons, the automated call is not a personalized message. Charities may therefore still receive this call even after they have filed their return. Charitable status can be revoked for failure to file a complete information return, even if the charity was inactive or is no longer operating.