CRA has provided guidance on the Canadian journalism organization rules
Amendments enacted on June 21, 2019 provide three measures intended to provide support to Canadian journalism organizations producing original news content, namely:
- a 25% refundable labour tax credit for salary or wages payable on or after January 1, 2019 in respect of an eligible newsroom employee of a qualified Canadian journalism organization (QCJO) that also qualifies as a qualifying journalism organization (QJO);
- a 15% non-refundable personal income tax credit to allow individuals to claim digital news subscription costs paid to a qualifying organization after 2019 and before 2025; and
- extending eligibility for registration as a qualified donee to registered journalism organizations (RJO), beginning on January 1, 2020.
CRA has published detailed guidance on its interpretation of these measures, especially on the 25% labour tax credit (which is capped at $13,750 per annum per employed journalist), including an attempted articulation of its policy that the journalistic content must be generated “based on journalistic processes and principles, intended for a general audience.” (For this aspect of its positions and practices, it relies on the recommendations of an Independent Advisory Board..) Somewhat as expected, CRA has taken the position that only regular journalist employees can qualify, so that amounts paid by the QJO to freelance employees would not qualify.
CRA notes that the only remedy of an organization which CRA has decided not to accept as a QCJO is to seek judicial review of that decision in the Federal Court.
Many of the concepts used in the RJO definition (or, to be more precise, the “qualifying journalism organization” definition on which it mostly rests) are modeled on the registered charitable organization rules, so that the corresponding CRA policies (e.g., as to what constitutes a permissible related business) have a familiar sound to them.
Summaries of “Guidance on the income tax measures to support journalism” CRA Webpage 23 December 2019 under s. 248(1) - qualified Canadian journalism organization – para. (b), subpara. (a)(v), subpara. (a)(vi), s. 125.6(1) - qualifying journalism organization, qualifying labour expenditure, eligible newsroom employee, s. 125.6(2), s. 12(1)(x), s.118.02(1) - qualifying subscription expense, s.118.02(2), s. 149.1(1) – qualifying journalism organization – para. (b), para. (c).