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Check Out What's New in CRA's Latest Charity Guide - by Ashid Dharsi 

Canadian Tax Adviser

 

February 05, 2013

 

Ashid Dharsi
GVA, Enterprise Tax

 

The CRA has revised Guide T4033, "Completing the Registered Charity Information Return", to require charities to provide more details about their political activities, based on changes announced in the 2012 federal budget. The CRA also released revised Form T3010, "Registered Charity Information Return". This revised information return can be used only for charities with fiscal periods ending in 2013 or later (i.e., on or after January 1, 2013).

Background
The 2012 federal budget noted that a charity is allowed to engage in political activity as long as the activities represent a limited portion of its revenues, are non-partisan, and are ancillary and incidental to its charitable purposes and activities. The government stated that it was concerned that charities were exceeding these limitations. Further, the government noted that there was no requirement for a charity to disclose the extent to which it receives funding from foreign sources for political activities. As a result, the budget proposed to provide the CRA with additional enforcement tools.

 

The CRA is allowed to suspend the tax receipting privileges of a charity that exceeds the limitations on political activities for one year. As well, the CRA is able to suspend the tax-receipting privileges of a charity that provides inaccurate or incomplete information in its annual information return until the charity provides the required information.

 

Revised form for fiscal periods ending on or after January 1, 2013
The registered charity information return has been revised to take into account the new legislative requirements requiring charities to provide additional details about their political activities. According to the revised guide, charities carrying out political activities must answer more questions in Section C5 and may also be required to complete Schedule 7 "Political Activities".

 

Form T3010 (13) is for fiscal periods ending on or after January 1, 2013.

 

Forms for earlier fiscal periods
The CRA clarifies that the revised form is only for charities with fiscal periods ending on or after January 1, 2013 in a "notice to reader" on its T3010 Registered Charity Information Return website. Charities with earlier fiscal periods should instead use:

 

  • Form T3010-1 - For fiscal periods ending from March 4, 2010 to December 31, 2012
  • Form T3010B (09) - For fiscal periods ending from January 1, 2009 to March 3, 2010.

The CRA states on its site that charities must fill out and send the CRA the correct form. If a charity sends the CRA the wrong form, the CRA will send it back to the charity, and the charity is then expected to complete and file the correct form, or else the charity's registration may be revoked.

 

For more information, contact your KPMG adviser.

 

 

 

 

Information is current to February 05, 2013. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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