Supporting the Supporters: Non-Profit Tax Relief
Canadian tax law provides unique benefits to organizations that serve the community.
1. The PSB Rebate
Unlike a standard business ITC (which recovers 100% of tax), the PSB rebate allows charities to recover a fixed percentage of the GST/HST they pay.
- Charities: 50% of the federal GST.
- Provinces: Varies. In Ontario, charities can recover 82% of the provincial portion of the HST.
2. Are Services Taxable?
Most services provided by a charity are exempt. This means you don't charge GST/HST on your memberships, tickets, or service fees.
- Exception: If your charity runs a "commercial" side-business (like a gift shop), those sales are taxable if they exceed the $50,000 threshold for public service bodies.
3. The $50,000 Threshold
For charities and qualifying public service bodies, the "small supplier" test may use a $50,000 taxable-supplies threshold (with additional gross-revenue conditions for some public institutions).
Filing the Rebate
You must file Form GST66, Application for GST/HST Public Service Bodies' Rebate. This is usually done annually or semi-annually.
Estimate GST/HST impact before planning non-profit rebate claims →