The recent budget included a number of items of interest for
members of the not-for-profit and charity section.
TAXES IN DISPUTE AND CHARITABLE DONATION TAX
Where a taxpayer has invested in a tax shelter that involves a
charitable donation and subsequently files an objection of Canada
Revenue Agency's reassessment of the tax credits claimed, the
2013 Budget permits Canada Revenue Agency to collect 50% of the
disputed tax, interest or penalties, pending the ultimate
determination of the taxpayer's liability. This measure will
apply in respect of amounts assessed for the 2013 and subsequent
taxation years. For recently released Q&A from the Canada
Revenue Agency on this measure, please go to: http://www.cra-arc.gc.ca/gncy/bdgt/2013/qa13-eng.html.
SUPPLIES OF PAID PARKING BY A PUBLIC SECTOR BODY
Special provisions exempt from GST/HST are all supplies of a
property or a service made by a PSB if all or substantially all
(generally 90% or more) of the supplies of the property or service
are made for free. A PSB includes a not-for-profit organization, a
charity, a municipality, a school authority, a hospital authority,
a public college, a university and a government. Budget 2013
proposes to clarify that this special simplifying exemption
provision does not apply to supplies of paid parking that are made
in the course of a business carried on by a PSB. Taxable parking
would include paid parking provided on a regular basis by a PSB.
Occasional supplies of paid parking by a PSB, such as those made as
part of a special fund-raising event, would continue to qualify for
the exemption. These measures are deemed to have come into force on
December 17, 1990.
SUPPLIES OF PAID PARKING THROUGH
A special exemption from GST/HST applies to parking provided by
charities that are not a municipality, university, public college,
school or hospital. Budget 2013 proposes to clarify that the
special GST/HST exemption for parking supplied by charities does
not apply to supplies of paid parking that are made in the course
of a business carried on by a charity set up or used by a
municipality, university, public college, school or a hospital to
operate a parking facility. This measure will apply to supplies
made after March 21, 2013.
FIRST-TIME DONOR'S SUPER CREDIT
The existing Charitable Donations Tax Credit provides individual
donors with a tax credit of 15% for the first $200 of an
individual's total annual charitable donations and a further
credit of 29% for any amount over $200 donated. Budget 2013
proposes to introduce a new temporary First-Time Donor's Super
Credit for First-Time individual donors providing an additional 25%
tax credit on cash donations up to $1000. Combining the Charitable
Donations Tax Credit and the First-Time Donor's Super Credit, a
First-Time donor would be entitled to a 40% federal tax credit with
respect to donations up to $200 and a 54% federal tax credit on the
portion of donations in excess of the $200 threshold. This measure
will apply in respect of first-time donations made on or after
March 21, 2013 and before 2018. For recently released Q&A from
the Canada Revenue Agency that further discusses this measure,
please go to: "http://www.cra-arc.gc.ca/
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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