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. For more information on this topic, call 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 by the Minister of National Revenue). For information on how the GST/HST applies to public institutions, see GST/HST Info Sheet GI-068, Basic GST/HST Guidelines for Public Institutions.
- 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 may be taxable.
- 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 annual taxable supplies test. To calculate your charity's gross revenue for the first test, add up all its business income, donations, grants, gifts, property income, investment income, any amount considered a capital gain from the disposition of property for income tax purposes, and any other revenue of any kind; less any amount considered a capital loss from the disposition of property for income tax purposes. To calculate taxable supplies for the purposes of the second test, add 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. Generally, 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. For more information on how to calculate the small supplier tests for charities see GST/HST Info Sheet GI-067, Basic GST/HST Guidelines for Charities
- 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.
- Determine if your charity is required to collect GST or HST on its taxable supplies. If your charity is registered or required to be registered for GST/HST, go to GST/HST rates for a complete list of rates for every province and territory.
No GST or HST is collected on zero-rated supplies or exempt supplies.
- 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 must 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, and it must not claim input tax credits for the GST/HST paid on most purchases. For information on how a charity completes its GST/HST return, see GST/HST Info Sheet GI-066, How a Charity Completes its GST/HST Return
- 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 and the federal part of HST it paid on its purchases. A public service bodies' rebate may also be available to charities resident in a participating province on the provincial part of HST at the applicable provincial rate.
- 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 GST/HST Info Sheet GI-067, Basic GST/HST Guidelines 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.
Related links
References
- GST/HST Info Sheet GI-066, How a Charity Completes its GST/HST Return
- GST/HST Info Sheet GI-067, Basic GST/HST Guidelines for Charities
- GST/HST Info Sheet GI-068, Basic GST/HST Guidelines for Public Institutions
- Guide RC4082, GST/HST Information for Charities
- Guide RC4034, GST/HST Public Service Bodies' Rebate