News and Insights

Revenu Québec Clarifies How GST and QST Applies to Third-Party Fundraising

Tax Development Jun 25, 2014

In a recent press release, Revenue Quebec (“RQ”) addressed third-party fundraising and the sales tax implications of such arrangements.  A “third-party fundraiser”, as defined in the article, is a person operating for the sole purpose of raising funds on behalf of a registered charity, but is not a registered charity itself.

With the notion that fundraising is a for-profit activity, RQ has clarified that supplies made by such organizations are taxable, even when the funds generated from these activities are later donated to a registered charity.  As such, a distinction is made between fundraising activities managed by such organizations, and those coordinated by a registered charity, which may be exempt from tax under certain conditions.

Furthermore, RQ noted that the supply of tickets to a qualifying  amateur performance or athletic event will maintain its exempt status, whether supplied by a third-party fundraiser acting as an agent of a charity, or by the charity directly.  However, in order for the supply of tickets to qualify for exemption from GST and QST, such events must meet the criteria set out in the Act respecting the Quebec sales tax for QST and the Excise Tax Act for GST.

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