Revocation tax and the T2046 tax return

Revocation tax is a tax that you owe if you lose your charitable registration. The tax is equal to 100% of the value of all remaining assets, after you have paid all your debts.

You will owe revocation tax unless you meet all the following conditions:

You can reduce the amount of revocation tax you owe by using your remaining assets on your charitable activities. You can also transfer your assets to an eligible donee during the winding-up period. This keeps your assets in the charitable sector.

Winding-up period

The winding-up period, also called the revocation period, starts the day after we issue the T2051A or the letter that serves as the notice of intention to revoke and ends one year later. During this period, you have to complete and file Form T2046, Tax Return Where Registration of a Charity is Revoked, and pay the revocation tax.

You must also send us:

If you send us this information and pay the revocation tax before the due date, the winding-up period can be shorter.

Calculating the revocation tax

Following the revocation of your registration status, complete Form T2046, Tax Return Where Registration of a Charity is Revoked, to calculate your revocation tax. Consult Guide RC4424, Completing the Tax Return Where Registration of a Charity is Revoked to help you complete Form T2046.

There are two dates associated with calculating the revocation tax:

The revocation tax is the total of the following:

Less:

If you owe revocation tax, send us a cheque or money order payable to the Receiver General for Canada when you file your Form T2046.

When is your Form T2046 due?

Your completed Form T2046 is due no later than one year after the date of your Form T2051A or the letter that serves as the notice of intention to revoke (Day 1).

What happens if you do not file your Form T2046?

If you do not file Form T2046, we will calculate the revocation tax based on the latest financial information we have on file and issue a notice of assessment.

Note

A charity that has been revoked must keep its books and records. For more information, go to Books and records.

Where should you send your Form T2046?

By mail:  Charities Directorate
               Canada Revenue Agency
               Ottawa ON  K1A 0L5

By fax:     613-941-0186

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