Activities outside Canada

Important notice

On June 23, 2022, Budget Implementation Act, 2022, No. 1, received Royal Assent. This change in legislation includes new rules that allow charities to make grants to non-qualified donees. As a result, some of the information on this page could change.

On November 30, 2022, the Canada Revenue Agency (CRA) posted the draft guidance document CG-032, Registered charities making grants to non-qualified donees for feedback. This document explains how the CRA expects to administer the recent changes to the Income Tax Act.

The CRA is in the process of reviewing and updating all related guidance products and web pages to ensure they are consistent with the new rules.

Before it applies for registration, an organization that conducts, or plans to conduct, activities outside Canada must understand how registered charities should carry out these activities in order to comply with the Income Tax Act.

How can a registered charity use its resources outside Canada?

A registered charity may only use its resources (funds, personnel, and property) inside or outside Canada in two ways:

Whether a registered charity carries out its own foreign activities through persons under its immediate control, or through intermediaries, it should put the following measures in place:

A registered charity must maintain sufficient books and records in Canada to allow the Canada Revenue Agency to determine if the charity is operating in compliance with the Income Tax Act. The books and records must show that the charity's funds are only being spent on its own activities or on gifts to qualified donees.

How can a registered charity conduct its activities through intermediaries?

A charity typically uses an intermediary when it is unable to carry out its own activities through its staff. Before deciding to work with an intermediary, a charity should be confident that the intermediary has the capacity (for example - personnel, experience, and equipment) to carry out the charity's activity and it will use the charity's resources as directed by the charity.

When working through an intermediary, a charity must direct and control the use of its resources. A charity that does not do this risks sanctions under the Income Tax Act, including the revocation of registered status.

To direct and control its resources when working through an intermediary, a charity should follow the measures listed above, as well as:

When entering into such arrangements, a registered charity has an obligation to ensure that it does not make its resources available, either directly or indirectly to:

  • a terrorist group that is a listed entity under the Criminal Code; or
  • any other organization engaged in terrorist activities or in activities that support terrorist activities.

Special provisions under the Charities Registration (Security Information) Act provide a mechanism for refusing to register or revoking the registration of any charity involved in supporting terrorism.

What information should be provided with an application for registration as a charity?

An organization that conducts, or plans to conduct, activities outside Canada must explain in its application what these activities are, and how they will be carried out. Each of the organization's activities/programs (both current and proposed) must be described in detail. Go to Describing your activities for instructions on how to provide specific, detailed information.

Furthermore, an organization that operates through an intermediary according to a written agreement must provide details about and/or a copy of the agreement with its application for registration. The agreement must clearly show that the charity will maintain direction and control over, and be fully accountable for, the use of its resources.

For detailed information on charitable activities outside Canada, go to Guidance CG-002, Canadian registered charities carrying on activities outside Canada.


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