We help a lot of Canadian charities because we were both raised to believe that if you have you should share. One thing we quickly learned is that we can donate more to Canadian charities at the same total cost to us if we claim the donation on our income taxes. We also donate to some international charities. (And yes, despite what Pearson airport and Canada Post believe, the USA is actually *international!*) In the past, we haven’t bothered too much with the receipts for those foreign donations because we believed that they were not necessary for filing our Canadian income taxes. When I read the tax forms more carefully this year, though, I was left wondering if we could claim donations made outside of Canada to get a tax deduction.
What the CRA Says on Schedule 9 Donations and Gifts
This was the wording on Schedule 9 that caught my eye
“Donations made to the United Nations, its agencies, and certain charitable organizations outside Canada” (line 334)
The amount you enter on this new line 334 is added directly into your “Total eligible amount of charitable donations and government gifts” just like your gifts to registered Canadian charities.
So can you donate to international charities and claim it on your Canadian taxes? Which charitable organizations outside Canada are included in “certain?”
Which are the “Certain Charitable Organizations Outside Canada” and Which Aren’t?
I went hunting on the CRA website to find out if the health and children’s charities we donate to internationally are “claimable.” Here’s what I found:
Did the Queen Give it the Royal Nod on Behalf of Canada?
I found at http://www.cra-arc.gc.ca/chrts-gvng/qlfd-dns/qd-lstngs/gftsfrmhrmjsty-lst-eng.html
that
“A listed charitable organization outside Canada that has received a gift from Her Majesty in right of Canada is a qualified donee until 24 months from the date of the gift.”
A list of which gifts Queen Elizabeth II has made within the required time period is provided. For the 2012 taxation year, these include
- Education Africa, in South Africa
- The Rhodes Trust, in the United Kingdom
- the Aga Khan Foundation, in Switzerland
- and several others
The list is certainly not long!
Did One of Our Politicians Go to Uni There
At http://www.cra-arc.gc.ca/chrts-gvng/qlfd-dns/qd-lstngs/prscrbdnvrsts-lst-eng.html there is a list of international universities to which you can donate and claim the expense on your Schedule 9.
(Donations to most Canadian universities are also eligible. You can check by looking up the name of the university on the CRA website at http://www.cra-arc.gc.ca/chrts-gvng/lstngs/menu-eng.html.)
So if you want to contribute to the University of Tartu, rest assured you can get back a portion of your contribution. (or donate more at no additional total cost to yourself) Or to the Maharishi University of Management, which I’m sure you know is in Iowa.
Gifts to the United Nations and Its Agencies Qualify Too
I could not find a specific list of United Nations agencies on the CRA website, so you might have to contact the CRA to determine if an agency is approved.
What Other International Gifts Can be Claimed on Schedule 9?
At this time, the UN and its agencies, foreign universities, and the organizations favoured by Queen Elizabeth II on Canada’s behalf are the only ones qualified. So our donations to help children in other countries and with world health issues are not eligible.
Still, if you did donate to one of those select few organizations, you should be sure to report your claim on Schedule 9. Assuming you have taxes to pay, you will be able to reduce them using the associated credit. Then you can use the money you didn’t have to pay in taxes to contribute more to the same or another charitable effort, at no additional total cost to yourself!
Do You Work Primarily in the USA or Internationally?
This information is intended for average Canadians who work in Canada, generally donate in Canada and pay taxes only in Canada. It appears that there may some other eligible donations that apply only in very specific circumstances, particularly for Canadians who work in the US (or other countries) and are paid in US dollars (or other currencies). If that describes you, you may want to talk to an accountant about which contributions to US (or international) charities you may be able to claim.
If you read the comments, below, you will find a very useful and detailed description of one case in which a taxpayer could claim donations made to US charities based on income earned in US dollars.
I don’t feel qualified to judge which international (including American) charities would qualify for this tax break in Canada. I’d recommend you look for a tax accountant who specializes in Canadians working abroad if you have a substantial donation that you wish to claim. (It’s possible that in that case you should be getting advance authorization from the CRA before submitting the claim.)
Related Reading
- Charitable Giving Falling to Fewer Canadians
- Optimize your Donations to Charity: Take Advantage of Taxes
- Four Overlooked Benefits of Charitable Donations and the Charitable Tax Credit
- Maximize the Benefit of your Donations to Charity: Helping Food Banks Feed the Most
Join In
Do you maximize your claims to charity using Schedule 9? Any tips or issues you’d like to report? Please share your experiences with a comment.
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I’m looking back at last year’s income tax return and realize that I have foreign investment income and do make donations to foreign charities. Is there any way that I can get a tax credit for donating foreign income to a foreign charity? The charity is not listed as otherwise eligible for a tax credit on Canadian income tax return.
You may want to contact the CRA and ask for confirmation but according to the comment by Peter Selinger, it should be possible to claim the donation if the charity would qualify as a Canadian charity if it was running here in Canada not in the other country and if your donation is less than the percentage of your foreign income allowed by the CRA for Canadian donations. It may be worthwhile getting an accountant to help clarify this. I’m not a financial advisor, a tax advisor or an accountant, unfortunately.
Thanks for your post, but your information is incomplete. It is indeed possible to claim a deduction for U.S. charitable contributions on your Canadian income tax; however (except in special cases that you mentioned in your post), you can only deduct them from the portion of your income (if any) that is from U.S. sources. So commenter Pat was indeed right.
See article XXI(6) of the U.S.-Canada Income Tax Treaty (http://www.fin.gc.ca/treaties-conventions/usa_-eng.asp):
“XXI(6): 6. For the purposes of Canadian taxation, gifts by a resident of Canada to an organization that is a resident of the United States, that is generally exempt from United States tax and that could qualify in Canada as a registered charity if it were a resident of Canada and created or established in Canada, shall be treated as gifts to a registered charity; however, no relief from taxation shall be available in any taxation year with respect to such gifts (other than such gifts to a college or university at which the resident or a member of the resident’s family is or was enrolled) to the extent that such relief would exceed the amount of relief that would be available under the Income Tax Act if the only income of the resident for that year were the resident’s income arising in the United States. The preceding sentence shall not be interpreted to allow in any taxation year relief from taxation for gifts to registered charities in excess of the amount of relief allowed under the percentage limitations of the laws of Canada in respect of relief for gifts to registered charities.”
For example, in 2012 I made a contribution of USD $200 to a registered U.S. charity. My U.S. income for 2012 was USD $600, or CAD $606.28 as reported by me on my form T2036 (using the official Bank of Canada average exchange rate for 2012). My limit for U.S. donations (Schedule 9, line 6, as applied to U.S. income only) was 75% of $606.28, or $454.71. So my entire $200 donation was eligible for deduction from my Canadian tax (of course only some small portion was actually deducted, as calculated on lines 11 and 12 of Schedule 9).
It is even possible to carry forward undeducted U.S. donations into future years. For example, if you made a U.S. charitable donation in 2012, but didn’t have any U.S. income in 2012, then you cannot deduct the donation from your Canadian tax in 2012. However, if you have U.S. income in 2013, then you can deduct the donation then.
See also here: http://ca.answers.yahoo.com/question/index?qid=20080427234413AAdwkAt
There are similar income tax treaties between Canada and many other countries as well, but each treaty might be different.
Thank you very much for this detailed and useful example! I’m sure readers will appreciate it and I do too.
Can donations to a religious organization in the DR that would qualify in Canada be claimed on tax return in Canada?
I don’t work for the CRA so I can only tell you my opinion which is no they wouldn’t qualify. Generally most charities in other parts of the world do not qualify, even very prestigious ones. However, it’s worth calling the CRA to double check if you are planning a large donation.