The information contained here is of applicability to non-profit organizations in Canada, however certain information may not be applicable to "public institutions:" school authorities, public colleges, universities, hospital authorities, or local authorities determined to be a municipalities.
- New Brunswick, Nova Scotia and Newfoundland collect their provincial sales tax in conjunction with the Goods and Service Tax (GST); they call this the Harmonized Sales Tax (HST).
- The Canada Revenue Agency (CRA) has a guide for non-profit organizations, "RC4081 - GST/HST Information for Non-Profit Organizations." It also has a guide for charities, "RC4082 - GST/HST Information for Charities." These guides are available on CRA’s Website at www.ccra-adrc.gc.ca.
- Subject to certain restrictions, a 50% rebate of the GST paid can be claimed by charities, and certain other organizations, regardless of whether these organizations are registered to collect the GST. This rebate would not be available on expenses where other rebates apply or input tax credits are received. Charities are eligible; also eligible are non-profit organizations that received at least 40% government funding in either the current or previous two fiscal years.
- "Taxable supplies" are goods and services that have not been defined by the Excise Tax Act as being "exempt" from the GST. Most goods and services of non-profit organizations are taxable supplies, however most services of charities are exempt.
- A non-profit organization would not have to register for and collect the GST if its total taxable supplies have not exceeded or equaled $50,000 in four consecutive quarters. Additionally, charities are not required to register if gross revenues have been $250,000 or less, in either of the two previous years, or the first year, where the charity is in its second year of existence.
- An organization may register for and collect the GST voluntarily.
- In general terms, where an organization is registered for the GST, it would collect GST on its taxable supplies only, and would remit the difference between the GST collected and any GST paid relating to the provision of these taxable supplies.
- There are different methods available for calculating the GST that must be remitted and any rebates available. The CRA allows the use of certain "quick" methods that may save the organization some record keeping. However, certain of these quick methods result in a different amount of tax being remitted. Be sure to consider your unique circumstances before opting for one of these methods. These methods are not discussed further.
- Different reporting periods are possible.
- The CRA has specific documentation requirements for invoice information and the GST.