December 20, 2012 – The CRA has now posted the final version of a new Guidance on arts activities which clarifies the requirements for charitable registration.
Background
On November 1, 2011, Canada Revenue Agency (CRA) released for consultation a draft Guidance on Arts Organizations and Charitable Registration under the Income Tax Act, inviting feedback from the public in January 2012. CAPACOA submitted comments in response to the CRA proposed Guidance on January 23, 2012. On March 14, CAPACOA also submitted an addendum to this brief, in order to support it with new findings from The Value of Presenting study. The CRA now issued the final Guidance, which clarifies the requirements for charitable registration.
The Outcome
The CRA responded favourably to four of ten specific recommendations in CAPACOA’s submission. Although the distinction between presenters and producers isn’t made much clearer in the final guidance, some wording which may have prevented presenting organizations from obtaining (or from maintaining) charity registration was amended. Most importantly, the CRA made significant changes to the Art forms and styles appendix, so as to more explicitly open the door to multidisciplinary activities and culture-specific activities. All in all, the CRA proved to be responsive to comments made by the arts community, even though there would still be room for improvement in recognizing support to local artists as a public benefit that enhances an arts industry as a whole.
Arts organizations whose activities further charitable purposes and who are considering applying for charitable status should review the new Guidance. Those who are currently operating as registered charities should also review the Guidance to ensure that they are well-positioned to maintain their status.
Previous and Related News Articles
Survey Results Support Submission to the Canada Revenue Agency
CAPACOA Provides Input on Charitable Registration for Presenters
CAPACOA Submits Brief on Tax Incentives for Charitable Giving
