GST & Non-Profits › Taxable Supplies

Unless the Excise Tax Act specifically states that a good or service provided is "exempt," it is considered to be a "taxable supply." Most goods and services provided by non-profit organizations are taxable supplies. However, most services provided by charities are "exempt" supplies, not subject to tax. An organization that is registered for the GST must collect the GST for any taxable supplies. The organization is entitled to input tax credits for the GST paid on purchases relating to the provision of taxable supplies.

Some taxable supplies are "zero-rated," and the tax charged is 0%. Examples of "zero-rated" supplies are basic groceries, prescription drugs, and certain medical devices. An organization is entitled to the full input tax credits for the GST paid on purchases relating to the provision of these "zero-rated" taxable supplies.

Examples of supplies that are "exempt" for all organizations are long-term residential accommodation, child-care services and personal care services. Below is a listing of goods and services that are considered to be "exempt," as indicated by the CCRA guide "RC 4081 - GST /HST Information for Non-Profit Organizations" Further below, are some additional exemptions mentioned by "RC 4082 - GST/HST Information for Charities." It should be emphasized that the Excise Tax Act contains the complete listing of exempt and zero-rated supplies: for example, the exemption of residential condominium fees is not mentioned by either of these guides.

Exempt for Non-Profit Organizations

• admission to a place of amusement where the maximum price is less than $1
• admission to athletic events or performances where 90% of the performers or athletes are neither directly or indirectly paid; government grants and expense reimbursements are not considered pay
• goods and services provided for free (blood and blood derivates are zero-rated)
• the sale of goods in fundraising where: 1-the organization is not in the business of selling the goods 2-the salespeople are volunteers 3-each item costs $5 or less 4-the goods are not sold at an event in competition with those in the business of selling those goods
• admission to gambling events that are not conducted in a commercial hall, and 90% of the assistants are volunteers
• lottery, raffle tickets, bingo cards, and casino bets (except the sale of provincial tickets)
• goods sold at an amount less than or equal to the direct cost
• certain memberships, see the CCRA guide
• most sales and leases of real property, see the CCRA guide
• recreational fees for children 14 and under, except where there is substantial overnight supervision
• recreational services for underprivileged persons
• food, beverages and short-term accommodation to relieve poverty, suffering or distress
• donations, grants and subsidies
• most sponsorships, for example the use of logos etc, but not for example advertising in a newsletter
• library cards of public libraries

Exemptions for Charities

• all of the above, and:
• most services
• sales of used and donated goods
• short-term residential accommodation
• meals-on-wheels programs
• parking space rentals
• short-term facility rentals
• catering services for private functions (eg. Wedding receptions)
• total admission to fundraising events
• most goods and services sold and provided in fundraising activities (unless the activity is regular or continual for a significant part of the year.