Goods and services tax/harmonized sales tax (GST/HST) checklist for charities

The purpose of this checklist is to help charities understand their GST/HST obligations and entitlements. Any questions regarding the content below should be directed to the CRA Business Windows Section at 1-800-959-5525.

Checklist

• Determine if your organization is a charity for GST/HST purposes.
  A registered charity for income tax purposes is also a charity for GST/HST purposes. However, a charity for GST/HST purposes does not include a public institution (that is, a registered charity that is a school authority, a public college, a university, a hospital authority, or a local authority determined to be a municipality).
  
  
• Determine if your charity is making taxable supplies.
  The tax status of your charity’s supplies (for example, its sales, leases, rentals, and services) has to be determined. While most of a charity’s supplies are tax-exempt, some of its supplies can be taxable at 5% or 13% (the 13% HST applies to supplies made in the participating provinces of Nova Scotia, New Brunswick, and Newfoundland and Labrador), or zero‑rated (taxable at 0%).
  
  
• Calculate the small supplier tests.
  Small supplier tests are used to determine if your charity must register for GST/HST purposes. Charities have two small supplier tests—the $250,000 gross revenue test and the $50,000 taxable supplies test. Gross revenue includes business income, donations, grants, gifts, property income, and investment income, less any amount considered a capital loss for income tax purposes. The $50,000 taxable supplies test includes worldwide revenues from supplies of goods and services subject to GST/HST, including zero-rated supplies. Do not include sales of capital property, supplies of financial services, or certain payments for goodwill. A charity is considered a small supplier if it has either $250,000 or less in annual gross revenue or not more than $50,000 in annual worldwide taxable supplies.
  
  
• Determine if your charity is required to register for GST/HST.
  If your charity makes taxable supplies, it may have to register for GST/HST. A charity that is a small supplier does not have to register for GST/HST, but it may do so voluntarily. Charities that are not small suppliers must register for GST/HST.
  
  
• Complete GST/HST returns if your charity is registered for GST/HST.
  If your charity is registered for GST/HST, ensure that GST/HST returns are filed and calculations are done correctly. Most charities that are registered for GST/HST have to file a return once a year using the “net tax calculation for charities.” A charity that uses this method remits 60% of the GST/HST it collects on most of its taxable supplies, but it can only claim input tax credits for the GST/HST paid on certain purchases.
  
  
• Apply for the public service bodies’ rebate.
  Regardless of whether your charity is registered for GST/HST, it is generally entitled to claim a 50% public service bodies’ rebate of the GST/HST it paid on its purchases. 
  
  
• Establish eligibility for other GST/HST rebates.
  Your charity may be entitled to other GST/HST rebates, including rebates of the GST/HST paid on printed books, expenses related to providing rent‑geared‑to‑income housing, goods and services exported outside of Canada, and goods and services removed from the participating provinces.
  
  
• Maintain adequate books and records.
  Generally, your charity must keep all records and supporting documents, in English or French, used to determine its GST/HST obligations and entitlements for a period of six years from the end of the year to which the records/documents relate.

More information on charities and the GST/HST can be found in Guide RC4082, GST/HST Information for Charities, and Guide RC4034, GST/HST Public Service Bodies’ Rebate.

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In Quebec, Revenu Québec administers the GST/HST. For more information on the GST/HST and Charities in Quebec, contact Revenu Québec at 1-800-567-4692, or see its publication The QST and the GST/HST: How They Apply to Charities.

Reference

• GST/HST for Charities