All About Estates

Foreign Charitable Organizations

In previous blogs, I have written about the definition of “qualified donee” in the Income Tax Act (Canada). This definition is important for two reasons. First, in order for a gift made by an individual to qualify for charitable tax credits, the recipient must be a qualified donee. Second, under the Income Tax Act (Canada), registered charities are only able to make gifts (other than in the course of carrying out their charitable activities) to qualified donees.

The definition of qualified donee in the Income Tax Act (Canada) includes foreign organizations that have applied to the Minister for registration. The relevant provisions of the Income Tax Act allow the Minister to register a foreign organization as a qualified donee for a 24 month period if it meets certain requirements. These requirements include:

  1. the foreign organization must have received a gift from the Government of Canada during that 24 month period;
  2. the foreign organization must be a charitable organization that is not resident in Canada; and
  3. the Minister must be satisfied that the foreign organization is carrying on relief activities in response to a disaster, providing urgent humanitarian aid, or carrying on activities in the national interest of Canada.

The Canada Revenue Agency has published guidance for foreign organizations that meet these requirements and wish to apply for qualified donee status. In particular, the Canada Revenue Agency has noted that the following information has to be provided by the foreign organization as part of the application: “(i) a copy of the organization’s governing document; (ii) a description of the organization’s activities; (iii) a copy of the letter or certificate granting charitable status to the organization, from the relevant authority in the country in which the organization is established; (iv) a copy of correspondence, agreements, or other documents related to the gift from the Canadian Government; and (v) proof that the gift was made (for example, a copy of the cheque).”

Readers of this blog who are involved with, or wish to donate to, foreign organizations that meet the requirements for qualified donee status may wish to review this guidance in more detail.

Laura West

About Laura West