Global

Details

  • Service: Tax, International Corporate Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 1/11/2013

Canada - CRA examines taxable status of non-profit organizations 

January 10: The Canada Revenue Agency (CRA) released an internal technical interpretation (TI) in which it considered whether a corporation under CRA audit as part of its non-profit organization project is exempt from income tax.

This TI differs from previous TIs on the taxable status of a non- profit organization (NPO) because the CRA provided jurisprudence to support the factors it considers when determining whether an entity has a for-profit purpose, and its position that an entity that cannot achieve its objectives without making a profit must be organized and operated for a profit purpose (i.e., it cannot be an NPO).


Lastly, the CRA provided its view on management fees that are not made on a cost-recovery basis.


Read a January 2013 report prepared by the KPMG member firm in Canada: CRA Concludes an NPO Entity is Not Tax-Exempt




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