Computer-Generated Official Donation Receipts

Policy Statement

Reference number
CPS-014

Effective date
February 22, 2000

Purpose

This policy statement outlines the Directorate's policy on computer-generated official donation receipts.

Statement

The Income Tax Act allows for computer-generated official donation receipts provided they are readable and the reliability of the computer data entries is sufficiently protected. A computer-stored copy does not require a signature to be considered a duplicate.

Implementation

1. This policy applies to registered charities, registered Canadian amateur athletic associations and registered national arts service organizations.

2. This policy also applies to a registered agent of a registered political party or an officially nominated candidate.

Legislative provisions

3. Subsection 230(2) of the Income Tax Act provides that every registered charity shall keep records and books of account, including a duplicate [Footnote 1], of each official donation receipt containing prescribed information for a donation received by it.

4. Subsection 3501(1) of the Income Tax Regulations provides that each official donation receipt that a registered charity issues must include, in a manner that cannot be readily altered, the prescribed contents of a receipt [Footnote 2].

5. Subsection 3501(3) of the Income Tax Regulations provides that official donation receipts can bear a facsimile signature.

6. Section 30 of the Canada Evidence Act and common law [Footnote 3] sources suggest that a court would favourably consider the argument that a duplicate receipt includes computer-generated copies, that is, the subsequent printed receipt of a computer recording, or soft copy, is a duplicate of the original receipt.

Imaged electronic signature

7. The term digital reproduction falls within the definition of a facsimile, and an imaged electronic signature is a digital reproduction. Although it does not fall neatly within the present day legal definition of a facsimile signature, an electronic signature has the same value.

Examples

8. For ease of understanding, the following examples are simplistic in nature. There are undoubtedly merge features or other methods to generate the sequential numbering of the receipts and the donor's information.

  • A registered charity creates a prototype of a prescribed official donation receipt, except the donor information, essentially by way of graphics and the use of an electronic signature. After receiving a donation, the charity will input the necessary donor data on the electronic receipt and print out a copy for the donor.

    As each copy of the receipt is a counterpart of the other or essentially the same, the requirement that a charity keep a duplicate of each receipt is met. The computer-stored receipt, or soft copy, complies with the Act as an electronic record. The data is merely recorded in a different form. The technology changes but the underlying principle remains the same.

  • A registered charity creates the same prototype as above except that it does not use an electronic signature. The copy provided to the donor is signed separately.

    It is apparent that the computer-stored receipt of a particular donation is a business record, but could the computer-stored receipt be viewed as a duplicate? The electronic receipt is not an exact counterpart: however, it contains the same information as the paper copy of the receipt. Therefore, the computer-stored receipt can be considered a duplicate for purposes of the Act.

  • A registered charity makes arrangements with a company to prepare two-part perforated forms, each to contain two prescribed official donation receipts, except the donor information but including a facsimile signature. On receiving a donation, the charity will input the necessary donor data, provide for sequential numbering, and will print the two-part form in a single laser pass, that is, in one print job.

    In this situation, the charity must keep the paper record as its duplicate receipt for purposes of the Act.

Sending electronic official donation receipts by e-mail on the Internet

9. Registered charities sending official donation receipts by e-mail on the Internet should ensure that the receipts are in read only or non-editable format. The recipient donor should only be able to read and print the receipt. The intent is to safeguard registered charities against fraud, for example, by preventing a donor from changing the amount on the receipt.

10. Computer software is available for registered charities to protect their receipts from hackers during the transmission. Charities can use a secure electronic signature, which means that the document is encrypted and signed with an electronic signature such as entrust technology. The receipt would then be generally safe from outside hackers or the recipient would know if someone had altered the contents of the receipt that was sent. The use of the secure electronic signature should be kept under the control of a responsible individual authorized by the registered charity.

11. Charities should provide the donor with a hyperlink to a site where the required software for the above operations can be found. This would allow a donor to read and print the receipt.

References

  • Canada Evidence Act, R.S.C. 1985, c. C-5.
  • Income Tax Act, R.S.C. 1985 (5th supp.) c.1.

Footnotes

[Footnote 1]
The definitions found in general language dictionaries and in law dictionaries are sufficiently broad to include a "duplicate of a receipt" in almost any form.
[Footnote 2]
Gifts and Official Donation Receipts, IT-110.
[Footnote 3]
Linden, J. in R. v. McMullen (1978), 5 C.R. (3d) 218 (Ont. H.C.), at p. 29: "[i]n my view, a computer print-out is a copy of what is contained within the computer, whether it be on tape or disc, though it is in different form than the original record. Though the technology changes, the underlying principles are the same."