Advantages of registration

The main advantages of being a registered charity are:

• Registration allows a charity to issue official donation receipts for gifts it receives. These receipts can be used to reduce the income tax payable of an individual donor or the taxable income of a corporate donor.

• Once registered, a charity is exempt from paying income tax under Part I of the Income Tax Act.

• Registered charities are eligible to receive gifts from other registered charities, such as foundations.

• Registration provides increased credibility in the community, since registered charities must follow certain rules and guidelines in order to maintain their registration.

• Many goods and services provided by registered charities are exempt from goods and services tax/harmonized sales tax (GST/HST). Also, in many situations, registered charities can claim a partial rebate for the GST/HST they pay.

References

• Guide T4063, Registering a Charity for Income Tax Purposes
• Guide RC4034, GST/HST Public Service Bodies Rebate
• GST/HST Info Sheet GI-067, Basic GST/HST Guidelines for Charities

Date modified:

2015-05-14