On July 17 2015, Canada Revenue Agency’s (“CRA”) Income Tax Rulings Directorate (“ITRD”) provided CRA’s Charities Directorate with its comments on whether a taxpayer continued to qualify as a “municipal or public body performing a function of government for purposes of 149(1)(c) of the [Income Tax Act] and the definition of a qualified donee in subsection 149.1(1).” The comments were publicly released on February 10, 2016 and confirm that CRA has not made any significant changes to its previously published positions.
CRA’s Charities Directorate is responsible for granting qualified donee status to organizations that meet the definition of a municipal or public body under paragraph 149(1)(c) of the Income Tax Act. Once approved by the Charities Directorate, such organizations are eligible to issue receipts for official donations and subject to additional books and record keeping requirements.
In this situation, the Charities Directorate had contacted the ITRD to verify whether changes to “the manner in which the [the taxpayer’s] Board of Directors is appointed” would impact the taxpayer’s status as a public body. The ITRD confirmed that public body status continued:
- to “be determined on a case-by-case basis”;
- to require that incorporated taxpayers be subject to “some specific control over the actions and operation of the corporation” by the federal, provincial, or territorial government or public that it serves;
- to mean that the taxpayer must be accountable “to the residents of the region over which it has jurisdiction”; and
- to mean that a taxpayer must “have the ability and powers to govern, tax, pass bay-laws and/or provide municipal-or-provincial-type services to its members or citizens.”