Foreign charities that have received a gift from Her Majesty in right of Canada: Summary of recent legislative changes

A foreign charity that receives a gift from Her Majesty in right of Canada (the Government of Canada) may become a qualified donee for a specific period if it meets certain criteria. Changes to the Income Tax Act that came into effect between January 1, 2012, and June 23, 2015, resulted in changes to the eligibility criteria and qualified donee period for foreign charities. A summary of these changes is outlined below.

To see the current requirements for foreign charities, go to CG-023, Foreign charities that have received a gift from Her Majesty in right of Canada.

January 1, 2013, to June 22, 2015

As a result of amendments that were introduced in the 2012 Federal Budget, during the period from January 1, 2013, to June 22, 2015, to be eligible for registration as a qualified donee, a foreign charity had to:

  • receive a gift from Her Majesty in right of Canada

  • meet the definition of a charitable organization that was established or created outside Canada and not resident in Canada. This means that it had to have exclusively charitable purposes and activities and mainly carry on its own charitable activities. The majority of its officials also had to deal at arm’s length with each other and each of the other officials. In contrast, a foreign charity that mainly funded other organizations, or was controlled by one individual or a group of persons who do not deal at arm's length with each other, namely a charitable foundation, would not qualify.

  • actively be doing at least one of the following:

    • carrying on relief activities in response to a disaster

    • providing urgent humanitarian aid

    • carrying on activities in the national interest of Canada

In addition, a requirement was introduced where the Minister of National Revenue had to consult with the Minister of Finance to register a foreign charity.

The qualified donee period was also changed to a 24-month period chosen by the Minister that includes the date of the gift from Her Majesty in right of Canada.

January 1, 2012, to December 31, 2012

As a result of changes introduced in the 2011 federal budget, a foreign charity that was or became a qualified donee during the 2012 calendar year had this status for a 36‑month period. The period started 12 months before the date the foreign charity received the gift from Her Majesty in right of Canada and ended 24 months after that date.

For example, a foreign charity that received a gift from Her Majesty in right of Canada on June 15, 2012, would have qualified donee status from June 15, 2011 to June 15, 2014.

For information on the eligibility criteria for a foreign charity that received a gift in the 2012 calendar year, go to Guidance CG-015, Charitable Organizations Outside Canada that Have Received a Gift from Her Majesty in Right of Canada (archived).

December 31, 2011, and earlier

Before January 1, 2012, the qualified donee period was 24 months. This period consisted of the year that Her Majesty in right of Canada made the gift to the foreign charity and the year after. The 24-month period may differ depending on whether a donor is a corporation, a trust or an individual.

For an individual donor, the 24-month period is based on the calendar year (January 1 to December 31).

For a corporation or a trust, the 24-month period is based on their tax year. For example, it can be the calendar year or any other 12-month period, such as April 1 to March 31.

Example

A foreign charity receives a gift from Her Majesty in right of Canada on June 15, 2009.

If the donor was an individual, the foreign charity would be a qualified donee from January 1, 2009, to December 31, 2010.

If the donor was a corporation or a trust with a tax year ending on March 31, the foreign charity would be a qualified donee from April 1, 2009, to March 31, 2011.

To see the eligibility criteria for foreign charities before January 1, 2012, go to Policy Commentary CPC-030, Foreign charities: Requirements for qualified donee status (archived).

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