Non-Profit Organization’s Tax Obligations

If you own or operate a non-profit organization, your tax reporting differs from a profit-driven company, however you may still have to file and report. This blog will discuss your tax and reporting obligations.

Did you know that:

  • Tax-exempt companies (it does not matter if you are incorporated or not) must file form TP-997.1-V or part 3 of form CO-17.SP if the organization’s taxable dividends or receivables exceed $10,000 during the fiscal period, the total value of the organization’s assets in the prior fiscal period were over $200,000 or if the organization was required to file TP-997.1-V or part three of CO-17.SP during the prior fiscal period.
  • Information returns are always required for agricultural organizations, chambers of commerce, and unregistered charities acting as non-profit organizations (such as clubs and societies)

In addition to the informational filings listed above, depending on the structure of the non-profit organization, you may also need to submit the following:

  • A Partnership Information Return (TP-600-V) for any non-profit owned and operated as a partnership.
  • A Trust Income Tax Return (TP-646-V) for any non-profit that mainly provides dining, recreational or sports services. The Trust return reports on capital gains/losses and property income. This return is mandatory even if the organization does not have taxable gains or income from property.

There are some circumstances where non-profit organizations are completely exempt from paying income tax, however, the criteria is very strict and must be proven to Revenue Quebec through documentation such as letters of patent, articles of incorporation and partnership agreements.

Some non-profit organizations receive government funding. This must be reported on your financial statements, even if the funding you receive is provided through another organization.

As you can see, there are many details, reports and obligations that non-profit organizations must follow. These are fluid: the organization may not qualify for government support one year, but then receive it the next. The organization may not have property that it can derive income from one year, but then have a property donated to them. It can be difficult to keep track of the documents and reports that are required by Revenu Quebec.

That’s where we come in.

Non-profit organizations focus on helping others and are often staffed by a mix of employees and volunteers. Therefore, a full time accountant to satisfy CRA and Revenu Quebec obligations is not always feasible. AF Accounting offers a range of services for companies and non-profit organizations that frees you from having to hire a full-time accountant. You can focus on the charitable work you love while knowing that your tax reporting is in good hands. We know the many needs non-profits face when it comes to taxes, audits, reporting, donations, etc. and we are in a prime position to help you run your organization smoothly.

If you are a non-profit organization that is just getting started, or if your non-profit is growing and you need professional assistance, contact us. We have the experience, passion and products to ensure your tax obligations are satisfied on time.

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