RC12. Why would an organization register as a charity with the CRA? What are the advantages?

RC12. Why would an organization register as a charity with the CRA? What are the advantages?


A registered charity has considerable advantages under Canadian income tax law.

A registered charity

  • is exempt from income tax
  • is able to issue official donation receipts. Individual donors use these receipts to reduce the income tax they would otherwise have to pay, while corporate donors use them to reduce their taxable income. This, in turn, may result in more gifts to the charity.
  • enjoys a favourable position under other federal taxes such as the Goods and Services Tax
  • can receive money from foundations and other charities because the organization is officially recognized as a “qualified donee”.(see FAQ R23)
  • can have increased credibility in the community because the public knows that the charity has to follow rules in order to have charitable status.
  • can get publicity on websites and listings of charities in Canada.
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T4063 Registering a Charity for Income Tax Purposes Guide

T2050 Application to Register a Charity Under the Income Tax Act Form