This module covers basic information on how to issue proper tax donation receipts for a gift certificate. The module answers questions such as: Can official tax receipts be issued for gift certificates? If yes, under what circumstances? Why is a gift certificate considered to be a pledge or a promise? What’s the difference?
Introduction
This module covers basic information on how to issue proper tax donation receipts for a gift certificate.
The module answers questions such as:
- Can official tax receipts be issued for gift certificates?
- if yes, under what circumstances?
- Why is a gift certificate considered to be a pledge or a promise? What’s the difference?
Receipting and Gift Certificates
Can tax receipts be issued when your charity receives donations of gift certificates?
Yes, official donation receipts can be issued:
- if the fair market value of the gift certificate can be determined
and
- the donor did not issue the gift certificate but purchased the gift certificate from the issuer of the certificate or from another third party
A gift certificate is considered a pledge or promise from a merchant to supply the goods and/or services specified on the face of the certificate.
Canada Revenue Agency has determined that a gift certificate constitutes property and a right, but only if the promise is enforceable, that is, only when the certificate was acquired for consideration, i.e. paid for.
If the gift certificate is donated by the issuer, it is a promise and not considered property.
So an official donation receipt cannot be issued.
More information can be found in CRA Guidance, CG-007, “Donations of Gift Certificates”
More Information
There are two FAQs on donation of gift certificate. They are available here.
Notice
Information in this module is provided for general educational purposes and not as legal or accounting advice. Consult a lawyer or accountant for professional advice.
Information is accurate as of 2019.
For changes after this date, consult Canada Revenue Agency.