Religious charities - Exemption

Policy commentary

Release date
March 9, 2000 (Revised October 17, 2003)

Reference number
CPC-016

Subject

Religious charities - Exemption from filling portions of Form T3010, Registered Charity Information Return

Purpose

To identify the conditions under which religious charities created after December 31, 1977, are exempted from filling some portions of the T3010.

Definitions

Religious charities:  A religious charity is a religious community or a religious order.

Commentary

1. The existing exemption from filling the publicly-accessible portions of Form T3010, Registered Charity Information Return applies to religious charities or charities associated to a religious charity pursuant to subsection 149.1(7) of the Income Tax Act during the applicable fiscal period that:

• were in existence on December 31, 1977
• have not received a gift at any time since December 31, 1977, for which they have issued an official donation receipt
• have not, directly or indirectly, received a gift from another registered charity, associated or not, that has issued official donation receipts since December 31, 1977

2. The exemption from filing the publicly accessible portion of the annual information return has persisted to this day, since it was originally granted in the mid-1970s. When the content of the annual information return was reviewed and re-designed in the years 1990-1995, religious charities were assured by the Canada Revenue Agency that the exemption would continue to apply.

3. Since 1977, religious charities to which the exemption applied, have had to adapt their own corporate structure to changing circumstances. Some of them have been discontinued. Others have merged together for efficiency's sake. Others still have spawned new organizations to further carry out some of their specific charitable work or for administrative purposes.

4. There are competing policy interests at stake, namely (1) ensuring that the public is informed of charities generally because it supports them through donations and the tax expenditure, and (2) protecting the information of organizations that are essentially private bodies that do not use the tax-assisted donation scheme and therefore, from a tax perspective, correspond more closely to non-profit organizations rather than to registered charities.

5. There is a legitimate interest in maintaining the exemption for new religious charities as long as they are logical outgrowths of formerly exempted organizations. This enables the charities in question to evolve in a way appropriate to their needs.

• The exemption should apply to two or more exempted charities now merging into a new organization.
• It should apply to independent funds that were formerly and explicitly accounted for and reported to the Canada Revenue Agency as part of an exempted charity, and that are administered on behalf of an exempted charity or its members exclusively.
• Finally, it should apply to organizations created after December 31, 1977:
  • whose purposes directly connect it to an exempted charity
  • whose purposes are ancillary and incidental to those of an exempted charity
  • whose membership consists exclusively of members of an exempted charity

6. The policy does not extend to associated charities that were not in existence prior to 1977, unless they qualify in their own right, under paragraph 5 above.

7. As for the original exemption, newly-created charities should obviously not issue official donation receipts from the date of their registration on; they should not receive gifts directly or indirectly from registered charities, associated or not, that issue official donation receipts.

References

• Subsection 220(2.1) of the Income Tax Act grants the Minister some discretion in waiving the filing of a prescribed form under reasonable circumstances.