Non-Profit Organizations Overpay Taxes Too

The operations of NPOs and charities can be complex, and sometimes with complexity comes opportunity.

There are over 88,000 Registered Charities in Canada. That’s a lot of positive contribution to Canadian society. While we support certain charities as a company and as individuals, we also are interested in helping them recover taxes so they have more funds to do what they do best.

For example: over the years the Provinces have changed the delivery model of certain health care services. This means that some medical services that were traditionally performed by hospitals are now being performed by third-party charities or non profits.

There are two opportunities specific to this area which may result in a rebate or refund of some or all of the tax paid in these scenarios. That means dollars back in the accounts of an organization that needs it the most.

“Charity funds” provided by an eligible charity to purchase medical equipment for use by a health facility to treat patients or diagnose their ailments can give rise to a refund of Provincial Sales Tax even if the equipment purchase is only partially funded by “charity funds” with the rest paid by a health facility or a health authority.

As is often the case, the details matter. “Charity funds” is defined specifically in legislation, and certain certification must be made by an officer of the eligible charity and an administrator of the health facility or health authority.

See bulletin 402:

Similarly, where charities and qualifying non-profit organizations make these specific supplies of property and services that were traditionally supplied by hospitals, there may be an opportunity to increase the GST/HST Rebate rate significantly.

If you’re a charity or non-profit and you are thinking of making a purchase related to health care or medical equipment, or if you’ve made a purchase in the last 4 years, we can help.