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Friday, November 25, 2011

Withholding tax rates around the world



Chart legend:
Interest - applicable to interest income from:
  • non-registered GICs (include MVA)
  • non-registered life insurance policies:
    • Dividends on Deposit,
    • Withdrawable Premium Fund (WPF) /Overflow Fund,
    • Delayed Claim Interest
  • non-registered deferred annuities
    • Delayed Claim Interest (i.e. GIAs and AAs)
    • Interest from Date of death to date of settlement for death claims
  • non-registered Payout Annuities
    • Delayed Claim Interest
  • RRIF
    • Interest from date of death to date of settlement for death claims
Dividend - applicable to dividends from non registered Canadian outside SPIO (stock purchase investment option) only
Trust - applicable to mutual funds distribution, segregated fund income allocation and employee profit sharing plan trust income
Lump Sum Pension - applicable to lump sum withdrawal from:
  • RPP
  • DPSP
  • RRSP
  • RRIF (amounts greater than 2 x minimum or 10% of value @ Jan 1)
  • withdrawal of commuted value from registered payout annuity at death
Periodic Pension - applicable to annuity payments from registered source
  • RPP - scheduled payments
  • DPSP - scheduled payments
  • RRIF - 2 x minimum or 10% of value @ Jan 1, whichever is greater
  • Payout Annuities - RPP, DPSP, RRSP scheduled payments
Lump Sum Annuity - applicable to the taxable portion of:
  • non-registered AA/IA if the annuitant was a non-resident at issue
  • non-registered payout annuity - commuted value
Periodic Annuity - applicable to taxable portion of scheduled payments from non-registered payout annuity
Foreign Income - applicable to foreign non business income and foreign interest from non registered foreign outside SPIO only
For payments from Canada:
Country Treaty? Interest Dividend Trust Lump Sum Pension Periodic Pension Lump Sum Annuity Periodic Annuity Income Averaging Annuity Contract Foreign Income
Algeria Y 15 15 25 25 15 25 15 15 25
Argentina Y 12.5 15(1) 25 25 15 25 15 15 25
Armenia Y 10 15 25 25 15 25 15 15  
Australia Y 10 15 15 15 15 15 15 25 25
Austria Y 10 15 15 25 25 25 25 25 25
Azerbarjian Y 10 15 15 25 15 25 15 15  
Bahamas N 25 25 25 25 25 25 25 25 25
Bahrain N 25 25 25 25 25 25 25 25 25
Bangladesh Y 15 15 25 25 15 25 15 25 25
Barbados Y 15 15 15 25 15 25 15 25 25
Belgium Y 10 15 15 25 25 25 25 25 25
Belize / Leeward / Windward Islands N 25 25 25 25 25 25 25 25 25
Bermuda N 25 25 25 25 25 25 25 25 25
Brazil Y 15 25 25 nil/25(2) nil/25(2) nil/25(2) nil/25(2) nil/25(2) 25
British Virgin Islands N 25 25 25 25 25 25 25 25 25
Bulgaria Y 10 15(3) 15 25 15 25 10 10 25
Country Treaty? Interest Dividend Trust Lump Sum Pension Periodic Pension Lump Sum Annuity Periodic Annuity IAAC Foreign Income
Cameroon Y 15 15 25 25 25 25 25 25 25
Cayman Islands N 25 25 25 25 25 25 25 25 25
Chile Y 15 15 (4) 15 25 25 25 15 15 25
China Y 10 15 (5) 25 25 25 25 25 25 25
Columbia N 25 25 25 25 25 25 25 25 25
Common Wealth of Ind States N 25 25 25 25 25 25 25 25 25
Costa Rica TBD
Republic of Croatia Y 10 15 15 25 nil/15 (6) 25 10 10 25
Cuba TBD
Cyprus Y 15 15 15 25 nil/15 (7) 25 15 25 25
Czech Republic Y 10 15 15 25 15 25 15 15 25
Denmark Y 10 15 15 25 25 25 25 25 25
Dominican Republic Y 18 18 18 25 18 25 18 25 25
Country Treaty? Interest Dividend Trust Lump Sum Pension Periodic Pension Lump Sum Annuity Periodic Annuity IAAC Foreign Income
Ecuador Y 15 15 15 25 15 (on amounts over $12,000) 25 15 15 25
Egypt Y 15 15 15 25 25 25 25 25 25
Estonia Y 10 15 15 25 15 25 10 10 25
Finland Y 10 15 15 25 20 25 15 25 25
France Y 10 15 15 25 25 25 25 25 25
Gabon Y 10 15 25 25 25 25 25 25 25
Germany Y 10 15 25 25 15 25 25 25 25
Greece N 25 25 25 25 25 25 25 25 25
Grenada N 25 25 25 25 25 25 25 25 25
Guyana Y 15 15 25 25 25 25 25 25 25
Holland (see Netherlands)
Hong Kong N 25 25 25 25 25 25 25 25 25
Hungary Y 10 15 15 25 15 25 10 10 25
Iceland Y 10 15 15 25 15 (8) 25 (8) 15 15 25
India Y 15 25 15 25 25 25 25 25 25
Indonesia Y 10 15 25 25 15 25 15 25 25
Ireland Y 15 15 15 15 15 15 15 nil 25
Israel Y 15 15 15 25 15 25 15 25 25
Italy Y 15 15 25 25 15 (9) 25 (9) 25 25 25
Ivory Coast Y 15 15 25 25 15 25 15 15 25
Country Treaty? Interest Dividend Trust Lump Sum Pension Periodic Pension Lump Sum Annuity Periodic Annuity IAAC Foreign Income
Jamaica Y 15 15 15 25 25 25 15 25 25
Japan Y 10 15 25 25 25 25 25 25 25
Jordan Y 10 15 25 25 25 25 25 25 25
Kazakhastan Y 10 15 25 25 15 25 25 25 25
Kenya Y 15 25 25 25 15 25 15 25 25
Korea (South) Y 10 15 25 25 15 25 10 25 25
Kuwait Y 10 15 25 25 15 25 15 25 25
Kyrgyzstan Y 15 15 15 25 15 25 15 15 25
Latvia Y 10 15 15 25 15 25 10 10 25
Lebanon Y 10 15 25 25 15 25 25 25 25
Liberia Y 20 15 20 25 25 25 20 25 25
Liechtenstein N 25 25 25 25 25 25 25 25 25
Lithuania Y 10 15 15 25 15 25 10 10 25
Luxembourg Y 10 15 15 25 25 25 25 25 25
Country Treaty? Interest Dividend Trust Lump Sum Pension Periodic Pension Lump Sum Annuity Periodic Annuity IAAC Foreign Income
Malaysia Y 15 15 15 25 15 25 15 25 25
Malta Y 15 15 15 25 15 25 15 25 25
Mexico Y 15 15 15 25 15 25 15 15 25
Moldova Y 10 15 15 25 15 25 15 15 25
Mongolia Y 10 15 15 25 15 25 15 15 25
Morocco Y 15 15 25 25 25 25 25 25 25
Netherlands Y 10 15 15 (10) 25 15 25 15 15 25
Netherlands Antilles N 25 25 25 25 25 25 25 25 25
New Zealand Y 15 15 15 15 15 (11) 25 (11) 15 25 25
Nigeria Y 12.5 15 25 25 25 25 25 25 25
Norway Y 10 15 15 25 15 25 15 15 25
Oman Y 10 15 25 25 15 25 15 15  
Pakistan Y 15 15 15 25 25 25 25 25 25
Panama N 25 25 25 25 25 25 25 25 25
Papua New Guinea Y 10 15 25 25 15 25 15 25 25
Peru Y 15 15 15 25 15 25 15 15 25
Philippines Y 15 15 25 25 25 (12) 25 25 25 25
Country Treaty? Interest Dividend Trust Lump Sum Pension Periodic Pension Lump Sum Annuity Periodic Annuity IAAC Foreign Income
Poland Y 15 15 15 25 15 25 15 25 25
Portugal Y 10 15 15 25 nil/15 (13) 25 15 15 25
Puerto Rico N 25 25 25 25 25 25 25 25 25
Romania Y 15 15 15 25 15 25 15 25 25
Russia Y 10 15 25 25 25 25 25 25 25
Saudi Arabia N 25 25 25 25 25 25 25 25 25
Senegal Y 15 15 15 25 15% (on amounts over $12,000) 25 15 15 25
Seychelles N 25 25 25 25 25 25 25 25 25
Sierra Leone N 25 25 25 25 25 25 25 25 25
Singapore Y 15 15 15 25 25 25 25 25 25
Slovak Republic Y 10 15 15 25 15 25 15 15 25
Slovenia Y 10 15 15 25 15 25 10 10 25
South Africa Y 10 15 15 25 25 25 25 25 25
Spain Y 15 15 15 25 15 25 15 25 25
Sri Lanka Y 15 15 15 25 15 25 15 25 25
Country Treaty? Interest Dividend Trust Lump Sum Pension Periodic Pension Lump Sum Annuity Periodic Annuity IAAC Foreign Income
Sweden Y 10 15 15 25 25 25 25 25 25
Switzerland Y 10 15 15 25 15 25 15 25 25
Taiwan N 25 25 25 25 25 25 25 25 25
Tanzania Y 15 25 25 25 15 25 15 15 25
Thailand Y 15 15 15 25 25 25 25 25 25
Trinidad / Tobago Y 10 15 25 25 15 25 25 25 25
Tunisia Y 15 15 15 25 25 25 25 25 25
Turkey N 25 25 25 25 25 25 25 25 25
Ukraine Y 10 15 15 25 25 25 25 25 25
United Arab Emirates Y 10 15 15 25 25 25 25 25 25
United Kingdom Y 10 15 15 25 nil 25 10 25 25
Uruguay N 25 25 25 25 25 25 25 25 25
Country Treaty? Interest Dividend Trust Lump Sum Pension Periodic Pension Lump Sum Annuity Periodic Annuity IAAC Foreign Income
USA Y 10 15 15 (14) 25 15 (14) 25 15 25 25
Uzbekistan Y 10 15 25 25 25 25 25 25 25
Vietnam Y 10 15 15 25 15 25 25 25 25
Venezuela Y 10 15 25 25 25 25 25 25 25
Virgin Islands (US) N 25 25 25 25 25 25 25 25 25
Yugoslavia N 25 25 25 25 25 25 25 25 25
Zambia Y 15 15 15 25 15 25 15 25 25
Zimbabwe Y 15 15 15 25 15 25 15 15 25
1 Argentina: Dividends are taxed at 10% if the beneficial owner is a company which holds directly at least 25% of the capital of the company paying the dividend; 15% in all other cases.
2 Brazil: Pension and periodic annuity payments - the first $4,000 paid in a calendar year is exempt.
3 Bulgaria: Dividends - for a non-resident owned investment corporation resident in Canada, withholding tax is at the rate of 10% if the beneficial owner is a company which controls directly or indirectly at least 10% of the voting power in the company paying the dividends.
4 Chile: Dividends - if the beneficial owner is a company that controls directly or indirectly at least 25% of the voting power in the company paying the dividends, withholding is at 10%; otherwise withholding is at 15%.
5 China: Dividends - if the beneficial owner is a company that controls directly or indirectly at least 10% of the voting power in the company paying the dividends, withholding is at 10%; otherwise withholding is at 15%.
6 Croatia: For pension payments, the first $12,000 CDN or equivalent in Croatian currency is exempt from tax.
7 Cyprus: Pension payments are only taxed on the excess of the basic amount of $10,000.
8 Iceland: Pension payments are only taxable in Iceland provided the total amount of pension paid in the year does not exceed $24,000 CDN or equivalent in Icelandic krones.
9 Italy: For pensions, nil if the amount is less than $10,000.
10 Netherlands: Income from a Trust is exempt from withholding tax if it is derived from sources outside the country in which the trust is resident.
11 New Zealand: Pensions are taxable on the full amount only when payment exceeds $10,000.
12 Philippines: Periodic pension payments arising in the Philippines are taxed at 30% on the amount in excess of $5,000.
13 Portugal: For periodic pension payments, tax is 15% of the amount in excess of $12,000 CDN or eqivalent Portuguese currency.
14 USA: Income from a Trust is exempt from withholding tax if it is derived from sources outside the country in which the trust is resident.
Under Article XVIII, Paragraph 3, the term "pensions" includes amounts paid under a sickness, accident or disability plan.
Published: 04/12/2009
 

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Thursday, November 24, 2011

October 2011: Monthly Indicator Recap



HOUSING INDICATORS* DIRECTION % CHANGE
(vs. last month)
OCTOBER LEVELS
Volume of MLS® Home Listings 0.26% 72,739
Volume of MLS® Home Sales 1.26% 38,819
Average MLS® Sale Price
(Canada)
0.65% $363,504
ECONOMIC INDICATORS** DIRECTION % CHANGE
(vs. last month)
RATES
Unemployment Rate
(October 2011)
0.20% 7.30%
GDP
(August 2011)
0.30% N/A
Retail Sales
(August 2011)
0.50% N/A
Consumer Price Index
(September 2011)
3.20%
(Year‐o‐year, September)
N/A
FINANCIAL INDICATORS DIRECTION % CHANGE
(vs. last month)
RATES
Prime Rate** 0.00% 3.00%
5 Year Fixed Posted Mortgage Rate*** 0.10% 5.29%
MLS® is a registered certification mark owned by The Canadian Real Estate Association.
*Seasonally adjusted month-to-month results; Source: The Canadian Real Estate Association
** Source: Statistics Canada
*** Source: RBC

Wednesday, November 23, 2011

European stress levels reaching a boiling point

Funding stress levels in the European zone are slowly inching towards an unsustainable situation as different credit markets across the continent are showing signs of faltering. The big news overnight is that Germany held a Bunde auction which could only be described as a disaster. With yields touching 2% on their 10 year note, returns were not enough to entice investors as the German Bundesbank had to purchase 39% of the offering so that the auction would not fail. While this is not the same situation as the peripheral countries, in the sense that they do not have to pay loan shark rates on their debt, it is a sign that investors would rather hoard their cash rather than being in any sort of debt security.
We are all aware the off the stress going on in the sovereign debt market but the other devil quietly lurking in the shadows is the interbank funding market. Banks primarily fund their activities through the use of the overnight market where they either borrow money if they are short or park money if they are over funded. The failure of this market is what ultimately brought down Lehman in 2008 as they were not able to fund their day to day operations. The London Interbank Overnight Rate (LIBOR) is the main rate and it has been slowly creeping since the beginning of summer. The European banks that are in better shape have significantly pulled back their operations in the overnight market while the struggling ones are in increasing need of it. This is creating a negative feedback loop where rates are continually rising and liquidity is continually falling. It is these secondary credit markets that can provide the early warning signs of a banking crisis.
The Euro has taken a beating overnight as seemingly continuous barrage of damaging news will not let the currency catch a breather. The common currency is down 3.4% on the month and 6% from its high of 1.4247 on Oct 27th. The downward trend channel is holding strong and the failure of the US debt committee couldn’t even help the Euro out. It will be up to the politicians to figure out a way to calm the market but their track record so far is not reassuring.

Saturday, November 12, 2011

Revenu Québec - Contribution Paid by the Employee to a Private Health Services Plan (Group Insurance Plan) - Tax News - Information Centre

Revenu Québec - Contribution Paid by the Employee to a Private Health Services Plan (Group Insurance Plan) - Tax News - Information Centre

November 8, 2011

Contribution Paid by the Employee to a Private Health Services Plan (Group Insurance Plan)

A tax credit for medical expenses may be claimed on the income tax return of an employee, a former employee or a retired employee who paid a contribution (or premium) to a private health services plan (group insurance plan) to cover, for example, medical or dental costs.

To indicate on an employee's RL-1 slip (RL-1) the amounts that he or she paid to such a plan, enter 235 in one of the blank boxes in the centre of the slip, followed by the amount or, in the empty space in the centre of the slip, write "Premium paid to a private health services plan" (or "Prime versée à un régime privé d'assurance maladie"), followed by the amount. This entry is optional.However, if you do not provide this information on the RL-1 slip, an employee may ask you for supporting documents. Do not include this amount in box A.

Revenu Québec - Rates, Thresholds and Amounts for 2012 Source Deductions and Contributions - Tax News - Information Centre

Revenu Québec - Rates, Thresholds and Amounts for 2012 Source Deductions and Contributions - Tax News - Information Centre

November 9, 2011

Rates, Thresholds and Amounts for 2012 Source Deductions and Contributions

Below are the rates, thresholds and amounts applicable for 2012 source deductions and contributions.

Indexation for 2012

Every year, the personal income tax system is automatically indexed. The indexation factor for 2012 is 2.66%.

Income thresholds and income tax brackets

For 2012, the income tax rates applicable to the three income tax brackets remain at 16%, 20% and 24% and the thresholds for the three income tax brackets have been indexed as follows:
  • The 16% rate applies to taxable income of $40,100 or less. (The threshold was previously $39,060.)
  • The 20% rate applies to taxable income of more than $40,100 but not more than $80,200. (The threshold was previously $78,120.)
  • The 24% rate applies to taxable income of more than $80,200.

Source deductions return (form TP-1015.3-V)

The Source Deductions Return (form TP-1015.3-V) has been amended to take into account the new tax credit for workers 65 or older. In addition, the amounts on form TP-1015.3-V have been indexed.

Amount for workers 65 or older

A new tax credit for workers 65 or older will gradually be introduced beginning January 1, 2012. This new tax credit is designed to eliminate the income tax that such workers would normally have to pay on a portion of their eligible work income that is in excess of $5,000. The primary work income targeted by the measure is employment income.
If an employee 65 or older expects to earn more than $5,000 in eligible work income during the year, he or she may ask you to reduce applicable source deductions by completing form TP-1015.3-V.

If you use Table TP-1015.TI-V

If you use Table TP-1015.TI-V to calculate source deductions, you are not required to make any adjustments since the amount of this tax credit is included in the amounts used to establish the deduction codes in Table TP-1015.TI-V. As of 2012, these codes will take into account the tax credit for workers 65 or older.

If you use the formulas

If you calculate source deductions using the formulas in the guide Formulas to Calculate Source Deductions and Contributions (TP-1015.F-V), changes have been made to take the new tax credit into account. For more information on the changes, see Part 2 of the guide.

Indexation of the amounts in form TP-1015.3-V

Amounts for calculating income tax withholdings


2012 2011
Basic amount $10,925 $10,640
Amount transferred from one spouse to the other $10,925 $10,640
Amount for other dependents who are 18 or over $2,930 $2,855
Amount for a child under 18 enrolled in post-secondary studies $2,015 $1,965
Additional amount for a person living alone (single-parent family) $1,585 $1,545
Amount for a severe and prolonged impairment in mental or physical functions $2,485 $2,420
Amount for a person living alone $1,280 $1,245
Age amount $2,350 $2,290
Amount for retirement income $2,090 $2,035
Reduction threshold used to calculate net family income (This income is used to calculate the age amount, the amount for a person living alone and the amount for retirement income.) $31,695 $30,875

Bonuses and retroactive pay

The threshold that determines the method to be used to calculate the income tax withholding from bonuses and retroactive pay has been increased from $13,300 to $13,700 for 2012.

Maximum deduction for employment income

The maximum deduction for employment income has been increased from $1,045 to $1,075 for 2012.

If you are using Table TP-1015.TI-V

The table takes into account the increase in the deduction in calculating the remuneration subject to source deductions of income tax.

If you are using the formulas

If you are using the formulas in the guide Formulas to Calculate Source Deductions and Contributions (TP-1015.F-V) to calculate source deductions, changes have been made to take into account the increase in the maximum deduction for employment income.

Amount paid to an emergency services volunteer

The tax-exempt amount of financial compensation paid to an emergency services volunteer has been increased from $1,045 to $1,075 for 2012.

Maximum pensionable earnings and contribution rate (QPP)

The QPP contribution rate has been increased from 9.9% to 10.05% for 2012, which corresponds to a contribution rate of 5.025% for the employee and 5.025% for the employer. In addition, the maximum pensionable earnings for the purposes of the QPP have been increased from $48,300 to $50,100. The maximum annual contribution to be withheld for any employee has therefore been increased from $2,217.60 to $2,341.65.

Maximum insurable earnings and premium rate (QPIP)

The maximum insurable earnings subject to QPIP premiums have been increased from $64,000 to $66,000 for 2012. Also, the employee premium rate has been increased from 0.537% to 0.559%, and the employer premium rate has been increased from 0.752% to 0.782%. As a result, the maximum employee premium is $368.94 (instead of $343.68) and that of the employer is $516.12 (instead of $481.28).

Maximum remuneration subject to the contribution to the financing of the CNT

The portion of the remuneration that exceeded $66,000 (instead of $64,000) is not subject to the contribution to the financing of the CNT for 2012.

Monday, November 7, 2011

Triple dip ahead for U.S. home prices
Triple dip ahead for U.S. home prices
The U.S. home market will hit another low by next year, dropping even further below its 2006 peak, according to Fiserv, a financial analytics company.

Fiserv said home values will fall 3.6% by next June in the U.S., which will be a new low from the 2006 peak, down 35% from that point.

CNN Money reports the company’s 2012 prediction might not even be the eventual bottom, due to the massive shadow inventory of foreclosures that has yet to even be released.

Some U.S. cities popular with Canadians are among those expected to be hardest hit with price decreases next year. Naples, Fla., for example, will see prices drop another 18.9% by next June, according to Fiserv. That’s the largest decrease in price of any metro area covered.

Las Vegas wasn’t far behind, expected to see prices fall 15.9%, followed by Riverside, Calif., predicted to fall another 14.8%, and Miami was projected with a 14.8% drop, according to CNN.

But other cities, already hard hit in years past, will see some kind of recovery by next year in prices. Oscala, Fla., for example, will see prices gain 22.4% for the 12 months ending June 30, 2012. CNN said Oscala had already seen home prices drop about 50% previously.

Similarly, other previously suffering markets will gain next year, like Napa, Calif., projected to rise 20.9% next year, and Panama City, Fla., expected to gain 18.2%.

QST Harmonization

Recently, the governments of Canada and Quebec announced the signing of a memorandum of agreement (MOA) to harmonize the Quebec sales tax (QST) and the federal goods and services tax (GST) effective January 1, 2013. The impact of harmonization and some of the transitional issues are expected to be different from those associated with the HST in Ontario. (As a result of last summer's referendum, British Columbia is expected to revert to its PST on April 1, 2013.)
As of January 1, 2012, the rate under the current QST regime will be 9.5 percent, applied to the selling price plus GST. Effective January 1, 2013, the rate of the new "amended QST" will be 9.975 percent applied to the selling price excluding GST. The change is approximately revenue-neutral.
The QST is already partially harmonized and it is expected that the tax base of the amended QST and the GST will continue to be largely the same, although financial services will become exempt and the current QST exemptions (for example, the exemption for books and for infants' diapers) will be maintained.
Interestingly, Quebec will retain its separate legislation (An Act Respecting the Québec Sales Tax) and, as a result, will administer the amended QST rather than an HST levied under the federal Excise Tax Act (as is the case in the other harmonized provinces). Revenu Québec (not the CRA) will continue to administer both the GST and the amended QST; therefore, businesses will be required to prepare separate returns under the amended QST and will be subject to audits by Revenu Québec.
Financial services are currently zero-rated for QST purposes, whereas the GST/HST system treats such services as exempt. As part of harmonization, financial services will become exempt. Although there will be no impact on consumers purchasing financial services (since zero-rated services are taxed at 0 percent), financial institutions will no longer be able to claim input tax refunds (ITRs), the Quebec equivalent of input tax credits, for the QST paid on their inputs relating to the supply of exempt financial services. However, the compensatory tax that was established to partly compensate for the ITRs that financial institutions were receiving will be eliminated over time. Overall, the financial services sector will experience a significant tax increase.
Large businesses (those with taxable sales exceeding $10 million) will gain, in that they will eventually be able to claim full ITRs on all inputs. Currently, the QST system allows ITRs for most inputs but not for certain goods and services (for example, specified road vehicles, energy, telecommunications, and meals and entertainment) acquired by large businesses. As a result of the harmonization, ITRs for the QST paid by large businesses on all inputs will be allowed gradually over a period of three years, beginning in 2018.
One interesting question is the extent to which the requirements for the amended QST can apply to non-residents, given that the requirements are under provincial legislation. Under section 92 of the Constitution Act, 1867, the provinces' legislative authority is limited to direct taxation "within the province" and to property and civil rights "in the province." In contrast, the provincial component of the HST and the collection requirements are imposed under federal legislation, and so are not similarly restricted.
Draft legislation, transitional measures, and additional details are expected to be announced by June 1, 2012.
Jung Ah Kwon, Michael Tsao, and Simon Thang
KPMG LLP, Toronto
jkwon1@kpmg.ca, mtsao@kpmg.ca, and sthang@kpmg.ca


Canadian Tax Focus
Volume 1, Number 3, November 2011
©2011, Canadian Tax Foundation

Disclosure of Information About Registered Charities

Subsections 149.1(15) and 241(3.2) allow the CRA to publicly disclose information about registered charities. This exception to the general confidentiality rules is intended to reassure the public that donated funds are not misused and to allow people to research a charity before making a donation. My own inquiries about a small sample of charities show that there is room for improvement in the CRA's administration of the rules.
Together, the two subsections allow for the disclosure of information such as the charity's name, location, registration number, date of registration, governing documents, application for registration, directors, financial statements, and notification of registration. Other permitted disclosures include any letter or notice that is a revocation of registration or that relates to a suspension or the imposition of a tax or penalty. Guidance CG-008 ("Confidentiality--Public Information"), dated August 15, 2011, contains a complete listing of permitted disclosures. Although both the Act and the guidance say that the CRA "may" disclose this information, a CRA official has confirmed that all of this information will be disclosed.
Most of the information is readily available on the CRA's Charities website (www.cra-arc.gc.ca/charities). However, some information is lacking for many charities, including financial statements, governing documents, and documentation regarding disciplinary actions taken by the CRA. To determine the ease or difficulty of obtaining this additional information, I telephoned the Charities Directorate on several occasions to ask for specific information about a group of charities. Four of the charities were in good standing, and several others had received some form of sanction. The agents who assisted me with my requests for disclosure clearly made their best efforts to be helpful. Still, I experienced several difficulties:
  • The CRA turned down my request for "all publicly accessible information." It appears that the onus is on the requester to have an in-depth knowledge of what information can legally be disclosed and then to request each item separately.
  • I received the requested material over a three-month period. Some of the delays apparently were caused by the fact that information is stored offsite from the offices of the Charities Directorate. In addition, e-mail delivery is not an option; material can be faxed, but this method is subject to page limits, so postal mail is the most common delivery method.
  • Four months after my original request, an agent called to say that the information that remained outstanding could not be located and the file was being closed. About 20 percent of the information that I requested was never received.
Although the Charities Directorate deserves to be complimented for the generally high quality of its website, the CRA's procedures for supplying information not on the site are neither expeditious nor user-friendly. Perhaps the CRA is doing all it can in an era of budgetary restraint. Disseminating documents such as financial statements and disciplinary communications through a website is certainly not as easy as disseminating the contents of the charities' T3010 returns.
David D'Onofrio
PowerOne Capital Markets Limited, Toronto
ddonofrio@poweronecapital.com


Canadian Tax Focus
Volume 1, Number 3, November 2011
©2011, Canadian Tax Foundation