Affordable Non-Profit Incorporation for Canadian Non-Profits and Charities

HST combines the 5% federal GST with a provincial component in five participating provinces. For 2026 the combined rates are 13% in Ontario, 15% in New Brunswick, Newfoundland and Labrador, and Prince Edward Island, and 14% in Nova Scotia since 1 April 2025. Elsewhere you charge the 5% GST alone, or GST plus a separate provincial tax. The rate follows the province of supply, not where your business sits.

Paper returns go to the CRA tax centre that serves your province or territory of residence, not to one national address. The correct address is printed in the paper return package and listed on canada.ca under mailing addresses for individual returns, and it differs for non-residents and for business returns. Filing electronically is much faster: for the 2025 tax year the CRA aims to issue a refund on an online return in about two weeks, against a considerably longer standard on paper.

As the rules stand for the 2025 tax year filed in 2026, the late-filing penalty is 5% of the balance owing plus 1% of that balance for each full month the return is late, to a maximum of 12 months, so 17% at worst. It rises to 10% plus 2% per month for up to 20 months, a 50% maximum, but only where the CRA formally demanded the return and had already charged a late-filing penalty for any of the three preceding tax years. Interest compounds daily.

If you owe nothing, no penalty applies, but a refund and benefit payments such as the Canada child benefit and the GST/HST credit are held up until the return is processed. If you owe, a late-filing penalty is charged and interest runs on the balance and compounds daily from the day after the due date. For the 2025 tax year the deadline was 30 April 2026. File even if you cannot pay, because the penalty is driven by filing, not payment.

Divide the total by one plus the tax rate, then subtract that result from the total to get the tax. In Ontario at 13% HST divide by 1.13; in Nova Scotia at 14% from 1 April 2025 divide by 1.14; where only 5% GST applies divide by 1.05. Quebec is layered, because QST of 9.975% applies to the pre-GST price, giving a combined 14.975%, so divide by 1.14975 to reach the pre-tax amount.

Social assistance and most income-tested government support are reported on a slip and included in income, then offset by a deduction, so they raise the income used for benefit calculations without adding tax. Federal and provincial benefit payments such as child benefits and the GST/HST credit are not taxable at all. Employment insurance and training allowances are taxable. Look at the slip you received, or the CRA page for that specific program, before assuming.

Tax legislation is the written law that imposes and administers tax: federally the Income Tax Act and the Excise Tax Act, plus each province's own statutes and the municipal bylaws behind property tax. A change usually begins as a budget announcement, is drafted into a bill, passes Parliament and takes effect on royal assent. Regulations and CRA guidance sit beneath the statutes and explain administration without replacing them. Some proposals are administered before they pass, and a few never do.

Federal and provincial governments and their departments are not subject to income tax, and a Crown corporation is taxable only where its own governing legislation makes it so. Sales tax is a different story: government purchases are generally subject to GST/HST, and public-service bodies such as municipalities, universities, schools and hospitals recover part of the tax through rebates rather than full input tax credits. Public-sector employers also withhold and remit payroll deductions the same way any other employer does.

The T1 General is the Canadian personal income tax and benefit return. It reports your income, deductions and credits for the calendar year and works out the tax owing or the refund, with provincial forms and schedules attached to it. Download the package for your province of residence from canada.ca, or let certified software build it for you. Filed copies and assessment summaries for past years stay available in CRA My Account. The 2025 return was due 30 April 2026.

There is no general exemption an individual can apply for. Minors file and are taxed the same way as anyone else, with the same personal credits. Organizations are different: a registered charity must apply to CRA and be approved, and a non-profit organization qualifies only while it is not operated for profit and no income is payable to its members. Most trusts, and all ordinary corporations including banks, stay taxable. Some museums qualify as registered charities.

Usually not. Unbottled water supplied through a municipal system, and basic municipal services such as sewer and wastewater, are relieved from GST/HST, so those lines on the bill carry no tax. Bottled water, water sold in small containers, and taxable extras such as certain repair, connection or installation work are treated differently. What appears on the bill varies by municipality, so read its tax line and check the CRA's GST/HST guidance for municipalities.

Non-profits pay GST/HST on most of what they buy, and many also have to charge it on what they sell. Being a non-profit is not a GST/HST exemption in itself. Registration turns on whether the organisation makes taxable supplies above the small-supplier threshold that applies to public service bodies, and several kinds of supply made by non-profits are exempt, which keeps them outside that test. Some non-profits also qualify for a public service body rebate of tax they cannot otherwise recover.