Penalties and suspensions
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 December 19, 2023, following a public feedback period, the Canada Revenue Agency (CRA) posted the guidance document CG-032, Registered charities making grants to non-qualified donees. This document explains how the CRA will 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.
In cases where a registered charity, registered Canadian amateur athletic association (RCAAA) or a registered journalism organization (RJO) is involved in serious non-compliance, or for repeat or multiple infractions, the Canada Revenue Agency (CRA) may impose intermediate sanctions (that is, financial penalties or suspensions) or may also proceed to revocation. Note, however, that if a registered charity, an RCAAA or an RJO fails to file its annual information return, the CRA will proceed directly to revocation.
Find the names of charities, registered Canadian amateur athletic associations and registered national arts service organizations that have received a sanction by using the List of charities and certain other qualified donees - advanced search and selecting either “Penalized” or “Suspended” from the “Sanction” dropdown list.
Find RJOs that have received a sanction by searching the List of registered journalism organizations.
The charts below list various infractions as well as the potential corresponding penalties and suspensions.
| Infraction | Penalty/Suspension for first infraction | Penalty/Suspension for repeat infractions |
|---|---|---|
| Not filing an annual information return (Form T3010) on time | $500 penalty (assessed when an application for re-registration is made) | $500 penalty (assessed when an application for re-registration is made) |
| Issuing receipts with incorrect information | 5% penalty on the eligible amount stated on the receipt | 10% penalty on the eligible amount stated on the receipt |
| Not keeping proper books and records or providing them to authorized CRA officials when requested | Suspension of tax-receipting privileges | Suspension of tax-receipting privileges |
| Charitable organization or public foundation carrying on an unrelated business | 5% penalty on gross unrelated business revenue earned in a fiscal period | 100% penalty on gross unrelated business revenue earned in a fiscal period and suspension of tax-receipting privileges |
| Private foundation carrying on a business | 5% penalty on gross business revenue earned in a fiscal period | 100% penalty on gross business revenue earned in a fiscal period and suspension of tax-receipting privileges |
| Foundation acquiring control of a corporation | 5% penalty on dividends paid to the charity by the corporation | 100% penalty on dividends paid to the charity by the corporation |
| Undue benefit provided by a charity to any person or entity. This includes making gifts to non-qualified donees, except when such gift or transfer is made in the ordinary course of a charity's programs. | 105% penalty on the amount of undue benefit | 110% penalty on the amount of undue benefit. If the undue benefit is not conferred from a gift the suspension of tax-receipting privileges is also applicable. |
| Issuing receipts when there is no gift or when the receipt contains false information (when the total penalties do not exceed $25,000) | 125% penalty on the eligible amount stated on the receipt | 125% penalty on the eligible amount stated on the receipt |
| Issuing receipts when there is no gift or when the receipt contains false information (when the total penalties exceed $25,000) | 125% penalty on the eligible amount stated on the receipt and suspension of tax-receipting privileges | 125% penalty on the eligible amount stated on the receipt and suspension of tax-receipting privileges |
| Making a gift to a person who is not a qualified donee (not including a gift made to an individual in the course of a charity's programs) | 105% penalty on the amount of the gift made to the non-qualified donee | 110% penalty on the amount of the gift made to the non-qualified donee |
| Entering into a transaction, including making a gift to another registered charity, to delay expenditures on charitable activities | For the charities involved, a 110% penalty on the amount of the expenditure avoided or delayed | For the charities involved, a 110% penalty on the amount of the expenditure avoided or delayed |
| Accepting gifts or transfers of property on behalf of a suspended qualified donee | Suspension of tax-receipting privileges | Suspension of tax-receipting privileges |
| Private foundation not divesting itself of a percentage of its shares at the end of its fiscal period, in respect of a class of shares | 5% of the result of multiplying the divestment obligation percentage of the private foundation for the fiscal period by the fair market value of all issued and outstanding shares in that class, except when there is a repeat infraction or another penalty for not disclosing, as indicated below, that applies for the fiscal period | 10% of the result of multiplying the divestment obligation percentage of the private foundation for the fiscal period by the fair market value of all issued and outstanding shares in that class at the end of the fiscal period |
| Private foundation not disclosing a material transaction in a class of shares at the end of its fiscal period when disclosure is required | 10% of the result of multiplying the divestment obligation percentage of the private foundation in that class of shares by the fair market value of all issued and outstanding shares in that class for the fiscal period | 10% of the result of multiplying the divestment obligation percentage of the private foundation in that class of shares by the fair market value of all issued and outstanding shares in that class for the fiscal period |
| Private foundation not disclosing a material interest held at the end of its fiscal period, by a relevant person, in a class of shares when disclosure is required | 10% of the result of multiplying the divestment obligation percentage of the private foundation in that class of shares by the fair market value of all issued and outstanding shares in that class for the fiscal period | 10% of the result of multiplying the divestment obligation percentage of the private foundation in that class of shares by the fair market value of all issued and outstanding shares in that class for the fiscal period |
| Private foundation not disclosing its total corporate holdings percentage at the end of its fiscal period in a class of shares when disclosure is required | 10% of the result of multiplying the divestment obligation percentage of the private foundation in that class of shares by the fair market value of all issued and outstanding shares in that class for the fiscal period | 10% of the result of multiplying the divestment obligation percentage of the private foundation in that class of shares by the fair market value of all issued and outstanding shares in that class for the fiscal period |
| Gifts other than designated gifts received from a non-arm's length charity that are not spent by the recipient charity on its own charitable activities or transferred to an arm's length qualified donee in the current or following tax year – this amount is in addition to a charity's disbursement quota | For the recipient charity, a penalty of 110% of the amount not expended or gifted | For the recipient charity, a penalty of 110% of the amount not expended or gifted |
| Devoting any resources to the direct or indirect support of, or opposition to, any political party or candidate for public office | One-year suspension of tax-receipting privileges | One-year suspension of tax-receipting privileges |
| Providing incomplete or inaccurate information on the annual information return (Form T3010) | Suspension of tax-receipting privileges until the required information is provided to the CRA on Form T3010 | Suspension of tax-receipting privileges until the required information is provided to the CRA on Form T3010 |
| Infraction | Penalty/Suspension for first infraction | Penalty/Suspension for repeat infractions |
|---|---|---|
| Not filing an annual information return (Form T2052) on time | $500 penalty (assessed when an application for re-registration is made) | $500 penalty (assessed when an application for re-registration is made) |
| Issuing receipts with incorrect information | 5% penalty on the eligible amount stated on the receipt | 10% penalty on the eligible amount stated on the receipt |
| Not keeping proper books and records or providing them to authorized CRA officials when requested | Suspension of tax-receipting privileges | Suspension of tax-receipting privileges |
| Carrying on an unrelated business | 5% penalty on gross unrelated business revenue earned in a fiscal period | 100% penalty on gross unrelated business revenue earned in a fiscal period and suspension of tax-receipting privileges |
| Undue benefit provided by an RCAAA to any person. This includes making gifts to any persons, except when such gift or transfer is made in the course of promoting amateur athletics in Canada on a nationwide basis. | 105% penalty on the amount of undue benefit | 110% penalty on the amount of undue benefit. If the undue benefit is not conferred from a gift the suspension of tax-receipting privileges is also applicable. |
| Issuing receipts when there is no gift or when the receipt contains false information (when the total penalties do not exceed $25,000) | 125% penalty on the eligible amount stated on the receipt | 125% penalty on the eligible amount stated on the receipt |
| Issuing receipts when there is no gift or when the receipt contains false information (when the total penalties exceed $25,000) | Suspension of tax-receipting privileges and 125% penalty on the eligible amount stated on the receipt | Suspension of tax-receipting privileges and 125% penalty on the eligible amount stated on the receipt |
| Making a gift to a person who is not a qualified donee (not including a gift made to an individual in the course of an RCAAA's programs) | 105% penalty on the amount of the gift made to the non-qualified donee | 110% penalty on the amount of the gift made to the non-qualified donee |
| Accepting gifts or transfers of property on behalf of a suspended qualified donee | Suspension of tax-receipting privileges | Suspension of tax-receipting privileges |
| Devoting any resources to the direct or indirect support of, or opposition to, any political party or candidate for public office | One-year suspension of tax-receipting privileges | One-year suspension of tax-receipting privileges |
| Providing incomplete or inaccurate information on the annual information return (Form T2052) | Suspension of tax-receipting privileges until the required information is provided to the CRA on Form T2052 | Suspension of tax-receipting privileges until the required information is provided to the CRA on Form T2052 |
| Infraction | Penalty/Suspension for first infraction | Penalty/Suspension for repeat infractions |
|---|---|---|
| Not filing an annual information return on time | $500 penalty (assessed when an application for re-registration is made) | $500 penalty (assessed when an application for re-registration is made) |
| Issuing receipts with incorrect information | 5% penalty on the eligible amount stated on the receipt | 10% penalty on the eligible amount stated on the receipt |
| Not keeping proper books and records or failing to provide them to authorized CRA officials when requested | Suspension of tax-receipting privileges | Suspension of tax-receipting privileges |
| Issuing receipts when there is no gift or when the receipt contains false information (when the total penalties for this infraction for the year do not exceed $25,000) | 125% penalty on the eligible amount stated on the receipt |
125% penalty on the eligible amount stated on the receipt |
| Issuing receipts when there is no gift or when the receipt contains false information (when the total penalties for this infraction for the year exceed $25,000) | One year suspension of tax-receipting privileges and 125% penalty on the eligible amount stated on the receipt |
One year suspension of tax-receipting privileges and 125% penalty on the eligible amount stated on the receipt |
| Accepting gifts or transfers of property on behalf of a suspended qualified donee | One year suspension of tax-receipting privileges |
One year suspension of tax-receipting privileges |
Providing incomplete or inaccurate information on the annual information return, including failing to include on the return the name of a donor that made a gift in excess of $5,000 during the tax year and the amount of the gift |
Suspension of tax-receipting privileges until the required information is provided to the CRA on the RJO annual information return |
Suspension of tax-receipting privileges until the required information is provided to the CRA on the RJO annual information return |
Related topics
Page details
- Date modified: