Canada: Proposed increase to disbursement quota rate for charities, NPOs
Draft legislation that would increase the disbursement quota rate for charities and non-profit organizations
Draft legislation that would increase the disbursement quota rate for charities and NPOs
The Department of Finance released draft legislation that would increase the disbursement quota rate to 5% (from 3.5%) for charities and non-profit organizations (NPO) that have fiscal periods beginning on or after 1 January 2023.
This measure was originally announced in the 2022 federal budget. Read TaxNewsFlash.
Note that another federal budget measure that allows charities to make certain disbursements to non-qualified donees, was recently enacted.
KPMG observation
Registered charities affected by the disbursement quota change need to review the proposed legislation and prepare now for these disbursement quota changes that are scheduled to come into effect in 2023. In particular, affected charities may need to review their policies and procedures to account for this change.
Read an August 2022 report [PDF 181 KB] prepared by the KPMG member firm in Canada
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.