News and Insights

CRA GST/HST Info Sheets re: Charities and Public Institutions

Tax Development Jun 08, 2011

The Canada Revenue Agency has revised three info sheets which provide basic information on common issues relating to how GST/HST applies to charities and public institutions.  The guides now reflect HST in Ontario and British Columbia, which came into effect on July 1, 2010 and the HST increase to 15% from 13% in Nova Scotia, also effective July 1, 2010,.  Both guides now include the definition of a “selected public service body”, which is defined to include: a school authority, a university or a public college that is established and operating otherwise than for profit; a hospital authority; a municipality; a facility operator; or an external supplier.

GST/HST Info Sheet GI-066, “How a Charity Calculates the Net Tax to be Reported on its GST/HST Return” explains how a charity calculates the net tax to be reported on its GST/HST return.  The net tax calculation method for charities simplifies the way charities calculate their net tax by removing the requirement to allocate purchases in relation to taxable and exempt supplies.  A charity is required to use the net tax method unless it meets one of the exceptions listed in the info sheet.   

Note that in calculating the total input tax credits and adjustments using the net tax method, any point-of-sale rebates for Ontario First Nations should not be included in the calculation of 60% of total GST/HST adjustments.  This point-of-sale rebate relief may be claimed by submitting form GST189, General Application for Rebate of GST/HST and using reason code 23.