GST/HST for Non-Resident Sellers in Canada
Non-resident sellers in Canada face a different GST/HST registration path: permanent establishment, the security deposit, the non-resident registration form, and the tax centre that handles the file.
GST/HST for Charities and Non-Profit Organizations in Canada
GST/HST for charities and non-profit organizations in Canada: the charity and qualifying non-profit distinction, the 50 percent public service bodies rebate, the 60 percent net tax calculation, and the forms that carry each claim.
Applies in: across Canada
Charities and non-profit organizations do not get a single GST/HST treatment. They get a set of special rules that sit on top of the normal system: a rebate that returns part of the tax they pay, a simplified way of calculating the tax they remit, and a list of exempt supplies that is wider than the list for an ordinary business. The rules reward getting the organization's category right first, because a registered charity, a qualifying non-profit organization, and a public institution are three different GST/HST categories with different rebate factors, different forms, and different filing duties. An organization that uses the wrong category files the wrong return, and an organization that assumes every activity is exempt collects tax it should not have collected, at a rate it did not expect.
Step 1: Name the category correctly
Start with the three categories the CRA uses on its public service bodies rebate page: a charity, a qualifying non-profit organization, and a selected public service body. A charity in this context is a registered charity or a registered Canadian amateur athletic association under the Income Tax Act. That registration is an income-tax status, granted by the Charities Directorate, and it is separate from GST/HST registration. An organization can be a registered charity without being GST/HST-registered, and it can hold a GST/HST number for rebate purposes without being a registrant.
A non-profit organization becomes a qualifying non-profit organization for rebate purposes only when its government funding is at least 40 percent of its total revenues. The CRA's rebate-filing page states the test directly, and requires the head office to file Form GST523-1, Non-profit Organizations: Government Funding, for each completed fiscal year for which the rebate is claimed. A registered charity or a registered Canadian amateur athletic association is not required to complete that form, because it is not a non-profit organization for that test. An organization that calls itself a non-profit but does not meet the 40 percent test cannot claim the rebate as a qualifying non-profit organization, whatever its incorporation documents say.
Public institutions are the third category, and they include municipalities, universities, school authorities, public colleges, and hospital authorities, each with its own rebate factor on Form GST66: 100 percent for a municipality, 67 percent for a university or public college, 68 percent for a school authority, and 83 percent for a hospital authority on the operation of a public hospital. A charity or public institution that also operates as a facility operator or an external supplier for eligible activities uses the 83 percent factor for those activities. The factors matter because the rebate is calculated activity by activity on the form, not as a single rate for the whole organization.
Step 2: Decide whether registration is required
A charity or non-profit organization asks the same first question as any person: does it make taxable supplies in Canada, and does the small-supplier threshold or an exception decide registration? This guide deliberately states no threshold figure for charities, because the registration rules for charities and public service bodies, including the threshold and the elections available, are set out in the CRA's charity guidance and differ from a one-figure summary. The organization should check Guide RC4082 and Info Sheet GI-067 for its own situation, and confirm with the CRA where the answer is not clear.
Two distinctions prevent the most common filing errors. First, a charity that is not registered can still claim the public service bodies rebate, and the CRA issues it a GST/HST number for that purpose. That number looks exactly like a registration number, in the format of a nine-digit business number plus RT0001, but the organization is not registered and does not file GST/HST returns. Second, a registered charity is generally required to file a GST/HST return for each reporting period, and most registered charities file once a year. An organization that does not know which position it is in should check its CRA account or call the CRA before filing anything, because filing a return as a registrant and filing a rebate application as a non-registrant are different acts with different consequences.
Step 3: Sort every supply into taxable, zero-rated, or exempt
The classification of supplies decides both what the organization charges and what it can recover. No GST or HST is collected on zero-rated supplies or on exempt supplies. The CRA's list of exempt supplies includes most property and services provided by charities and public institutions, and its worked net-tax example treats two specific supplies as exempt: parking, and admissions to a fundraising dinner. The same example treats gallery admissions and gift shop sales as taxable, which shows why the charity label alone does not exempt a supply. A museum shop, a catering service sold to the public, or a hall rental on commercial terms can be taxable even when the seller is a charity, and the guidance for the specific supply decides.
The cost of getting this wrong runs in an unexpected direction. Under the net tax calculation described in Step 4, a charity remits 60 percent of the GST/HST it collects on most taxable supplies. Tax collected in error on an exempt supply is remittable at 100 percent, not 60 percent. An organization that collects tax on exempt supplies therefore accumulates a liability larger than the calculation it thought it was using, and the error is discovered on audit, not at the till. Before charging tax on any supply, check the supply against the charity guidance; before treating a supply as exempt, check the same guidance. Where a payment is a donation with nothing supplied in return, and where it is consideration for a supply, is part of the same check, and the guidance should be read for the specific arrangement rather than assumed.
Step 4: Use the net tax calculation if the charity is registered
A registered charity generally must use the net tax calculation for charities to determine its net tax. The CRA's charity checklist states the method in one sentence: a charity using it remits 60 percent of the GST/HST it collects on most of its taxable supplies, and must not claim input tax credits for the GST/HST paid on most purchases. The CRA's basic guidelines for charities give the return mechanics: the charity determines the total GST/HST charged, whether collected or not, and reports 60 percent of that amount; for a limited number of supplies, such as taxable sales of capital property and real property, it reports 100 percent of the GST/HST charged; it enters zero for input tax credits unless a specific situation allows a claim; and the difference is the charity's net tax.
The exceptions to the no-input-tax-credit rule are narrow and specific. The CRA's worked example allows input tax credits for a ventilation system, as an improvement to real property, and for computer equipment, as capital property, where each is used more than 50 percent in commercial activities. The remaining GST/HST paid on purchases is not lost: it is the base for the public service bodies rebate in Step 5. The two calculations work together on the same return, and a charity that claims input tax credits on ordinary purchases while also claiming the full rebate double-counts the same tax. Charities that are public institutions, and charities that have made a valid election to use the regular method, do not use the mandatory calculation, and the election itself is a formal step, not a choice made on the return form.
Step 5: Claim the public service bodies rebate
Whether or not the organization is registered, a charity is generally entitled to claim a 50 percent public service bodies rebate of the GST and the federal part of the HST it paid on its purchases. The same 50 percent federal factor applies to a qualifying non-profit organization on non-selected public service body activities. A rebate of the provincial part of the HST may also be available to an organization resident in a participating province, at the applicable provincial rate, claimed on the provincial schedule.
The claim is made on Form GST66, Application for GST/HST Public Service Bodies' Rebate and GST Self-Government Refund, with Form RC7066-SCH, Provincial Schedule, where a provincial amount is claimed. A GST/HST registrant can file the rebate application online with its return through GST/HST NETFILE or through My Business Account or Represent a Client. A non-registered organization claims through the public service bodies rebate web form or through the file-a-rebate option in My Business Account. A qualifying non-profit organization must also file Form GST523-1 for each completed fiscal year claimed, through the web form, My Business Account, or Represent a Client. Filing deadlines, the ability to carry a rebate forward, and the treatment of a rebate application overlooked when the return was filed are all set out on the CRA's rebate pages and must be checked for the period in question; this guide states no deadline figure, because the deadline turns on the reporting period and the filing route.
Step 6: Check the other rebates before closing the file
The public service bodies rebate is the main recovery, but the CRA's charity checklist names four more: rebates of GST/HST paid on printed books, on expenses related to providing rent-geared-to-income housing, on goods and services exported outside Canada, and on goods and services removed from the participating provinces. On Form GST66, printed books carry a 100 percent federal rebate factor, and a charity or public institution's export of property or services also carries a 100 percent factor. Each rebate has its own eligibility conditions, and a charity with book sales, export activity, or rent-geared-to-income housing should work through each one rather than assuming the 50 percent rebate covers everything. Quebec adds its own layer: in Quebec, the GST and the Quebec sales tax are administered by Revenu Québec, and the provincial rebate mechanics follow the Quebec system, so a Quebec charity should confirm the provincial claim with Revenu Québec.
Related guides:
The three charity and non-profit figures, verified on CRA pages
| Public service bodies rebate, charity or qualifying non-profit | 50% of the GST and the federal part of the HST paid on eligible purchases |
|---|---|
| Net tax calculation for registered charities, most taxable supplies | Remit 60% of the GST/HST collected, and generally claim no input tax credits on most purchases |
| Qualifying non-profit organization, government funding test | Government funding at least 40% of total revenues, filed on Form GST523-1 each fiscal year |
Questions people ask
What is the difference between a charity and a non-profit organization for GST/HST?
A charity, for GST/HST purposes, is a registered charity or a registered Canadian amateur athletic association under the Income Tax Act. A non-profit organization is a broader category, and only a qualifying non-profit organization can claim the public service bodies rebate: one whose government funding is at least 40 percent of its total revenues. A registered charity does not complete the government-funding form, because it is not a non-profit organization for that test. A public institution, such as a school authority or hospital authority, is a third category with its own rebate factors. The label on the organization's incorporation papers does not decide the GST/HST category; the CRA's definitions and the funding test do.
Does a charity have to register for GST/HST?
A charity follows the same starting question as any person: whether it makes taxable supplies in Canada above the small-supplier threshold, and whether any exception applies. Registration thresholds and elections for charities and public service bodies have their own rules in the CRA's charity and public service body guidance, so this guide does not state a single threshold figure for charities. A charity that is not registered can still claim the public service bodies rebate, and the CRA gives such a charity a GST/HST number for rebate purposes that looks like a registration number but is not registration. If the organization is unsure whether it is registered, the CRA directs it to check its account or call the CRA, because a rebate-only number and a registrant number look identical.
What is the public service bodies rebate, and how much is it?
A rebate of the GST, or the federal part of the HST, paid or payable on eligible purchases and expenses, claimed by a charity, a qualifying non-profit organization, or a selected public service body. For a charity or a qualifying non-profit organization, the federal rebate factor on non-selected public service body activities is 50 percent, as shown on [Form GST66](https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/gst66.html). A rebate of the provincial part of the HST may also be available to an organization resident in a participating province, at the applicable provincial rate on the provincial schedule. The rebate is claimed on Form GST66, Application for GST/HST Public Service Bodies' Rebate and GST Self-Government Refund, with [Form RC7066-SCH](https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/rc7066-sch.html) where a provincial amount is claimed. A qualifying non-profit organization must also file [Form GST523-1](https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/gst523-1.html) for each completed fiscal year for which it claims the rebate.
How does a registered charity complete its GST/HST return?
Most registered charities must use the net tax calculation for charities, and must file a return once a year. Under that calculation, the charity remits 60 percent of the GST/HST it collects on most taxable supplies, and must not claim input tax credits for the GST/HST paid on most purchases. For a limited number of supplies, such as taxable sales of capital property and real property, the charity reports 100 percent of the GST/HST charged. Input tax credits are available in specific situations, such as capital property and improvements to real property used more than 50 percent in commercial activities. The detailed method is in GST/HST Info Sheet GI-066, How a Charity Completes its GST/HST Return, and Guide RC4082, GST/HST Information for Charities. A charity that has made an election to use the regular method, or that is a public institution, does not use the mandatory calculation.
Are a charity's supplies exempt from GST/HST?
Many are, but not all, and the answer is supply by supply. The CRA's type-of-supply list includes most property and services provided by charities and public institutions among exempt supplies, and the CRA's net tax example treats parking and admissions to a fundraising dinner as exempt supplies. Other supplies a charity makes can be taxable, including gallery admissions and gift shop sales in the same CRA example. Collecting GST/HST on an exempt supply creates a liability at 100 percent, not at the 60 percent net tax rate, which is why the classification of each supply matters before the invoice is written. The charity guidance in GI-067 and RC4082 sets out which supplies are exempt; check the supply against that guidance rather than assuming every activity of a charity is exempt.
What other GST/HST rebates can a charity claim?
Beyond the public service bodies rebate, the CRA's charity checklist names rebates of GST/HST paid on printed books, on expenses related to providing rent-geared-to-income housing, on goods and services exported outside Canada, and on goods and services removed from the participating provinces. Printed books carry a 100 percent federal rebate factor on Form GST66, and exports by a charity or public institution also carry a 100 percent factor. Each rebate has its own eligibility conditions and its own form or line, so a charity should work through the checklist supply by supply instead of treating the 50 percent public service bodies rebate as the only recovery available. Filing deadlines and carry-forward rules for the public service bodies rebate are set out on the CRA's rebate page and must be checked for the reporting period in question.
Sources
- Canada Revenue Agency, GST/HST public service bodies' rebate — eligibility, Form GST66 and RC7066-SCH, Form GST523-1 for qualifying non-profit organizations —
- Canada Revenue Agency, GST/HST checklist for charities — 60 percent net tax calculation, no input tax credits on most purchases, 50 percent public service bodies rebate, other rebates —
- Canada Revenue Agency, Basic GST/HST Guidelines for Charities (GI-067) — net tax calculation mechanics, 60 percent and 100 percent reporting, input tax credit exceptions, references to GI-066 and RC4082 —
- Canada Revenue Agency, Application for GST/HST Public Service Bodies' Rebate and GST Self-Government Refund (Form GST66) — rebate factors by activity type, including 50 percent for charities and qualifying non-profit organizations and 100 percent for printed books and exports —
- Canada Revenue Agency, Calculate the net GST/HST — worked charity example, exempt parking and fundraising dinner admissions, taxable gallery admissions and gift shop sales, input tax credits for capital property and real property improvements used more than 50 percent in commercial activities —
- Canada Revenue Agency, File a rebate — qualifying non-profit organization 40 percent government funding test, Form GST523-1 filed by the head office for each completed fiscal year —
Where a figure could not be verified on a Canada Revenue Agency page at the time of writing — the registration threshold figure for charities, the provincial-part rebate factors by province, and the filing deadlines and carry-forward periods for the public service bodies rebate — this guide states no figure and points to Guide RC4082, Info Sheet GI-067, Form GST66 with its provincial schedule, and the CRA's rebate pages instead. Check those sources for the organization's reporting period before filing.