By Ryan M. Prendergast

Canada Revenue Agency Clarifies Process for Charities Seeking to Change Fiscal Year-End

The Canada Revenue Agency’s (CRA) Charities Directorate has recently clarified the procedure for registered charities seeking to change their fiscal year‑end. Any alteration to a charity’s fiscal period end impacts its T3010 filing obligations and must receive prior approval from the CRA. Whether a person manages a small organization or a large foundation, understanding these requirements is essential to avoid processing delays or compliance issues.

Charities can request a change to their fiscal year‑end either electronically through the CRA’s My Business Account (MyBA) portal or by mailing or faxing a letter to the Charities Directorate. Regardless of the method, the request must include, among other details, a detailed description of the change, specifying the new fiscal year-end and the proposed effective date.

Once approved, charities will have to file a transition period return covering the months between the old and new year‑end. For example, moving from a December 31 to a March 31 year‑end requires a full T3010 return for January 1–December 31, plus a separate return for January 1–March 31. The CRA states that it will not process any return for the transition period until approval is granted. As such, organizations should submit change requests as soon as the decision to change their fiscal year end is made. For more details, visit the CRA’s website.

Finally, charities should review their governing documents – such as bylaws – to ensure the fiscal year‑end date is updated. Amended bylaws reflecting the new fiscal year‑end must be certified and filed with the CRA to complete the process.

Canada Revenue Agency Updates Penalties and Suspensions Page

The Charities Directorate of the CRA has updated its penalties and suspensions page on its website, clarifying how it imposes penalties and sanctions on registered charities, registered Canadian amateur athletic associations (RCAAAs) or registered journalism organizations (RJOs). It is crucial for registered charities, RCAAAs and RJOs to understand these potential sanctions to ensure ongoing compliance and avoid jeopardizing their registered status.

According to the CRA, it may impose intermediate sanctions (financial penalties or suspensions) or proceed to revocation if a registered charity, RCAAA or RJO is involved in:

• serious non-compliance
• repeat or multiple infractions
• other breaches of the Income Tax Act that cannot appropriately be addressed through other corrective measures

The CRA lists infractions that may lead to intermediate sanctions to include, among other infractions, failing to file an annual information return on time, issuing official donation receipts with incorrect information, issuing official donation receipts with false information or without receiving a gift, keeping inadequate books and records, accepting a gift on behalf of a suspended qualified donee and failing to report information that is required on the annual information return.

Financial penalties for intermediate infractions can range from a percentage of the revenue or benefit involved to fixed amounts, and subsequent assessments generally carry more severe penalties, potentially including mandatory suspension. In certain cases, such as issuing donation receipts with false information where the total penalties exceed $25,000 in a single year, a mandatory suspension will be triggered. For specific details on penalties and suspensions, please see the CRA’s website.

Registered charities, RCAAAs and RJOs should proactively review their operational practices and ensure robust internal controls are in place to mitigate the risk of non-compliance and the resulting sanctions.

The Canadian Non-Profit Sector: Key Insights from Canada Revenue Agency Aggregate Data

The CRA recently released aggregate data compiled from Form T1044 Non-Profit Organization (NPO) Information Return filings by NPOs with fiscal period end dates in 2021 and 2022.

The aggregate data reveals the number of NPOs operating in Canada and fulfilling their reporting obligations. In 2021, 36,260 NPOs filed a T1044, while in 2022, this figure was 36,060. The aggregate data highlights five key metrics – total receipts, total assets, total liabilities, total remuneration and benefits paid to all employees and officers, as well as total remuneration and benefits paid to employees and officers who are members. This information can be useful for identifying general trends within the non-profit sector.

By understanding these broad trends, NPOs can better contextualize their own operations and be informed of the scale and scope of the sector in which they operate. This information can also be useful for strategic planning and understanding the general economic activity within the Canadian non-profit landscape.

​Read the April 2025 Charity & NFP Law Update