Advantages and obligations of becoming a registered charity
Before applying for registration with the Canada Revenue Agency, you should be aware of the advantages and obligations.
- You can issue official donation receipts for gifts that you receive from individuals and corporations.
- You are exempt from paying income tax.
- You are eligible to receive gifts from registered charities.
- You gain increased credibility in the community.
- Many goods and services you provide are exempt from goods and services tax/harmonized sales tax (GST/HST).
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.
Your main obligations are to:
- devote your resources (funds, personnel, and property) to your charitable purposes and activities
- maintain direction and control of the use of all your resources (funds, personnel, and property)
- file your annual Form T3010, Registered Charity Information Return, within six months of your fiscal year-end
- meet your annual spending requirement (disbursement quota)
- keep reliable and complete books and records
- issue complete and accurate official donation receipts
- maintain your status as a Canadian legal entity
Also, you should inform the Charities Directorate of any changes to your mode of operation or legal structure.
If you do not meet your obligations, you may be subject to a penalty and may have your registered status revoked.
- Consequences of not meeting the obligations of registration (non-compliance)
- Operating a registered charity
- Books and records
- What information must appear on an official donation receipt from a registered charity?
- Date modified: