Budget 2014 - State Supporters of Terrorism

Notice to the reader

This measure has received Royal Assent.

The budget proposes that where a charity or a Canadian amateur athletic association has accepted a donation from a foreign state after February 10, 2014, as defined in the State Immunity Act, which is listed as a supporter of terrorism, the CRA may:

  • refuse to register the charity or the Canadian amateur athletic association (CAAA); or
  • revoke the registration of a registered charity or a registered Canadian amateur athletic association (RCAAA).
Which foreign states are listed as supporters of terrorism?

As of February 11, 2014, the foreign states listed as supporters of terrorism are the Islamic Republic of Iran and the Syrian Arab Republic. The list can be found under the Order Establishing a List of Foreign State Supporters of Terrorism.

What is considered a foreign state for the purposes of this new rule?

Under the State Immunity Act, a foreign state includes:

  • any sovereign or other head of the foreign state or any of its political subdivisions while acting as such in a public capacity;
  • any government of the foreign state or any of its political subdivisions, including any of its departments, and any agency of the foreign state; and
  • any of its political subdivisions.
In what case could an organization be refused registration or face revocation based on a donation it accepts from a listed foreign state?

The budget proposes that a charity or CAAA could be refused registration or face revocation if it accepts a donation after February 10, 2014 from a listed foreign state.

How will the CRA apply its administrative discretion in the application of these new rules?

The CRA will take into consideration the specific facts of each case, and will exercise this discretionary authority in a fair and judicious manner. The CRA will provide information to help charities and CAAAs understand the application of the proposed measures.

Will this change increase the reporting burden on charities?

No, this change will not require any additional information to be reported by charities on their annual information return.

Where can I get more information about the changes to account for state supporters of terrorism?

The CRA is committed to providing taxpayers with up-to-date information. The CRA encourages taxpayers to check its Web pages often. All new forms, policies, and guidelines will be posted as they become available.

In the meantime, please consult the Department of Finance Canada's Budget 2014 documents for details.

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