Revenu Québec (“RQ”) recently released an updated Information Return form to be completed by registered charities, museums, cultural or communications organizations, and recognized political organizations that carry on activities in Québec. These organizations must annually file with RQ the Information Return for Registered Charities and Other Donees (TP-985.22-V). In addition to all of the previously required information, the updated form (to be used for taxation years ending in 2014 and beyond) requires organizations to provide RQ with substantially new information. Below is a summary of the significant changes to the form.
Section 2.2 – Expenditures and gifts made to qualified donees
Under this section, in addition to setting out amounts spent by the organization on various listed expenses, organizations are now required to include an amount spent on these items that pertain to what is referred to as “other activities”, as applicable. This section appears to have been included to account for those expenses that do not pertain to one of the other listed activities such as those related to the organization’s objectives, management and general administration, fundraising, or political activities.
Section 5 – Directors
In this section of the old form, organizations were required only to provide RQ with their directors’ first and last name, address, telephone number, profession or sector of activity, and position in the organization (as previously required). In completing the new form, organizations are now required to provide further information, including birthdates, start date and end date of their respective mandates, as well as whether the director is at arm’s-length or non-arm’s-length with the organization’s other directors and officers.
Section 6 – Political activities
Perhaps the most significant change to the new Information Return form is the addition of a political activities section. This section requires organizations to provide the following information:
- whether the organization was involved in political activities and the amount spent on such political activities; and
- whether the organization made a gift to a recognized donee that would likely be used to support the donee’s political activities and the amount of such gift.
The organization is also expected to include with its return a note explaining why the organization’s political activities or those of the donees to which the gift was made, as applicable, are incidental to the organization’s objectives and why they do not constitute what may be considered to be support or opposition to any political party or public office candidate.
The inclusion of this section comes as no surprise to the sector. As noted in a previous issue of our Newsletter, last year the Canada Revenue Agency (“CRA”) released a new T3010 Information Return for registered charities. Similar to section 6 of the Quebec return, Schedule 7 of the new T3010 requires charities to provide comparable information with respect to their engagement in political activities.
Section 7 – Other information
Relevant organizations are now required to confirm whether they returned property (with a fair market value over $50) to donors after having issued official receipts for the donation. If so, organizations are also now required to indicate the total value of such returned gifts.
Type of Gift
In addition to confirming whether the organization received a gift of qualified property (i.e., land that has an undeniable ecological value which has been gifted to a certain type of registered body) or a work of art (as previously required), organizations must now confirm whether they received a gift of a non-qualifying security (i.e., any security that is not listed on a designated stock exchange and whose issuer and owner are not dealing at arm’s-length with each other) or a purchase option (i.e., an option to purchase property as a gift).
RQ now requires more detailed information with respect to an organization’s fundraising activities. Whereas the old Information Return required organizations to confirm whether they engaged in fundraising activities such as dinners, balls, concerts, shows or similar events, the new form requires organizations to confirm whether they conducted fundraising activities directly or indirectly through a third party. Organizations are also required to disclose the type of fundraising in which they engaged. Specifically, the form requires organizations to select one or more of the following:
- subscription campaigns
- sales of lottery tickets
- fundraising dinners
- tournaments/sports events
- collection boxes
The form also includes a tick box where organizations may indicate that they engaged in “other” fundraising activities. If this box is selected, organizations must specify the activity.
Previously, private foundations that are subject to the excess corporate holding regime were required to provide RQ with a copy of the documents that the foundation submitted to CRA along with their form T2081 –Excess Corporate Holdings Worksheet for Private Foundations. Now, such foundations are simply required to enclose a copy of their form T2081. While this is a minor difference in protocol, it is likely to relieve the administrative burden in filing the Information Return and decrease the risk of filing an incomplete return.
More information on the excess corporate holdings regime for private foundations may be accessed here.
Finally, RQ’s new Information Return is more user friendly, with the language having been amended in certain instances to provide greater clarity to organizations and their professional advisors. RQ has also released an updated guide to assist organizations in filing the new Information Return.