Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Whether the purchase of kosher-approved food products from various retailers constitutes a charitable donation?
Not a charitable donation.
It does not constitute an outright gift, nor is it a gift to a registered charity, and official receipts have not been submitted.
XXXXXXXXXX A.M. Brake
December 16, 1997
Re: Charitable Donations - Kosher Products
This is in reply to your letter of September 4, 1997 in which you enclosed magazine articles regarding the acceptability of claims for charitable donations in respect of the purchase of kosher food products.
Section 118.1 of the Income Tax Act (the "Act") permits a tax credit in computing tax, within specified limits, for gifts made to registered charities, if supported by official receipts issued in accordance with the Income Tax Regulations. As indicated in paragraph 3 of Interpretation Bulletin IT-110R3, Gifts and Official Donation Receipts (copy enclosed), a gift is a voluntary transfer of property without valuable consideration. Generally a gift is considered to have been made if all of the following conditions are satisfied:
(a) property (usually cash) is transferred by a donor to a registered charity;
(b) the transfer is voluntary; and
(c) the transfer is made without expectation of return.
In the situation outlined in the articles, a gift would not be considered to have been made since none of the above conditions are satisfied. The first condition is not met as the purported donation is made to retailers of kosher-approved food products and these retailers are not registered as charities; the second condition is not met as the purported cash donation is part of the cost of the food products and is not made voluntarily; and the third condition is not met as the purported donation is not without consideration since food products are received in exchange for their donation. Consequently, a claim for a charitable donation tax credit could not be made in respect of kosher food purchases.
Furthermore, according to subsection 118.1(2) of the Act, charitable donations must be supported by official receipts. Since taxpayers would not have such receipts, their claims for a deduction under subsection 118.1(3) would be denied on that basis alone.
We trust our comments will be of assistance to you.
John F. Oulton
Business and Publications Division
Income Tax Rulings and
Policy and Legislation Branch
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