March 2004

Registered Charities – Give and Take

In order to better reflect long-term rates of return expected by a charity and to better meet its donor’s wishes, the disbursement quota with respect to capital assets not being used directly in charitable activities is being reduced from 4.5% to 3.5%.

The government proposes to add a variety of penalties to combat non-compliance effective for taxation years beginning after March 22, 2004. These penalties include a $500 penalty for late filing of the annual information return, a penalty of 5% of the donation for issuing an incomplete donation receipt and suspension of tax-receipting privileges for failing to comply with certain verification and enforcement sections of the Act. The charity has the option of transferring an amount equivalent to the penalty to a qualified donee in lieu of paying the penalty.

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