Public Service Bodies’ Rebate for Charities Resident Only in Ontario

GST/HST Info Sheet GI-176
July 2020

This version replaces the one dated March 2016.

In this publication, all legislative references to the “Act” are to the Excise Tax Act, unless otherwise specified. The information in this publication does not replace the law found in the Act and its regulations.

If this information does not completely address your particular situation, you may wish to refer to the Act or relevant regulation, or call GST/HST Rulings at 1-800-959-8287 for additional information. If you require certainty with respect to any particular GST/HST matter, you may request a ruling. GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, explains how to obtain a ruling or an interpretation and lists the GST/HST rulings centres.

If you are located in Quebec and wish to request a ruling related to the GST/HST, please call Revenu Québec at 1-800-567-4692. You may also visit the Revenu Québec website at revenuquebec.ca to obtain general information.

For listed financial institutions that are selected listed financial institutions (SLFIs) for GST/HST or Quebec sales tax (QST) purposes or both, whether or not they are located in Quebec, the CRA administers the GST/HST and the QST. If you wish to make a technical GST/HST or QST enquiry related to SLFIs, please call 1-855-666-5166.

GST/HST rates

Reference in this publication is made to supplies that are subject to the GST or the HST. The HST applies in the participating provinces at the following rates: 13% in Ontario and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%. If you are uncertain as to whether a supply is made in a participating province, see GST/HST Technical Information Bulletin B-103, Harmonized Sales Tax – Place of Supply Rules for Determining Whether a Supply is Made in a Province.

General

A charity may be able to recover a percentage of the GST and the federal part of the HST paid or payable^{Footnote 1}  on its eligible purchases and expenses by claiming a PSB rebate. In addition, a charity resident in Ontario may also be able to claim a PSB rebate to recover a percentage of the provincial part of the HST paid or payable on its eligible purchases and expenses.

A charity resident only in a non-participating province is not entitled to a PSB rebate of the provincial part of the HST.

The PSB rebate is calculated based on your non-creditable tax charged in a given claim period. Your non-creditable tax charged is generally the GST/HST paid or payable on eligible purchases and expenses that cannot be recovered in any way (for example, input tax credits [ITCs], refunds, rebates) other than by claiming a PSB rebate. For more information on how to calculate your non-creditable tax charged, refer to Guide RC4034. More detailed information on the non-creditable tax charged is available in GST/HST Memorandum 13-5, Non-creditable Tax Charged.

To file your rebate application, use Form GST66, Application for GST/HST Public Service Bodies’ Rebate and GST Self-Government Refund, and, if applicable, Form RC7066-SCH, Provincial Schedule – GST/HST Public Service Bodies’ Rebate.

Definitions for terms such as public institution, non-creditable tax charged, claim period, facility operator, and external supplier are found in Guide RC4034.

Participating province means a province that has harmonized its provincial sales tax with the GST to implement the HST. Participating provinces include New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island, but do not include the Nova Scotia offshore area or the Newfoundland offshore area except to the extent that offshore activities are carried on in that area.

This info sheet sets out 8 steps to work through to help you calculate your PSB rebate:

• The first 2 steps will help you determine whether this info sheet can be used in your situation to calculate your PSB rebate.
• Steps 3 to 6 will help you calculate the PSB rebate of the GST and the federal part of the HST, which is entered on line 305 of Form GST66.
• Steps 7 and 8 will help you calculate the PSB rebate of the provincial part of the HST, which is entered on line 305-ON of Form RC7066-SCH.

How to determine if this info sheet applies to your charity

Step 1 – Determine if you are a charity that is not a selected PSB

To use this info sheet, you must be a charity that is not a selected PSB.

A charity means a registered charity or registered Canadian amateur athletic association for income tax purposes, but does not include a public institution. A charity can issue official donation receipts for income tax purposes.

A selected PSB is a school authority, a university or a public college that is established and operated other than for profit, a hospital authority, a municipality, a facility operator or an external supplier. If you are any of these bodies, you are a selected PSB and cannot use this info sheet to calculate your PSB rebate. If you are a selected PSB, refer to Guide RC4034 for information on calculating your PSB rebate.

If you are a charity that is not a selected PSB, go to Step 2.

Step 2 – Determine if you are resident in Ontario and not in any other province

You must know in which province(s) you are resident for purposes of the PSB rebate. This info sheet applies to charities that are resident only in Ontario and not in any other province.

To determine in which province(s) you are resident, refer to GST/HST Info Sheet GI-121, Determining Whether a Public Service Body is Resident in a Province for Purposes of the Public Service Bodies’ Rebate.

If you are a charity that is not a selected PSB and you are resident in Ontario only, go to Step 3.

How to calculate your PSB rebate amount for line 305 on Form GST66

Step 3 – Determine which steps apply to you

After establishing that this info sheet applies to you, you must determine the steps that apply to calculate your PSB rebate. This determination is based on the tax you paid, as follows:

• If you only paid the GST, Steps 4 and 6 apply (skip Step 5).
• If you only paid the HST, Steps 5 to 8 apply (skip Step 4).
• If you paid both the GST and the HST, Steps 4 to 8 apply.

Step 4 – Calculate your non-creditable GST charged

To calculate your non-creditable GST charged in a particular claim period, do the following:

• list all the eligible purchases and expenses on which you paid the GST (5%) during that claim period and determine the amount of the GST paid or payable on each eligible purchase or expense;
• if you received a provincial point-of-sale rebate of the provincial part of the HST payable during that claim period on eligible purchases of qualifying items^{Footnote 2}  (for example, printed books), you must also list such eligible purchases in this step and determine the amount of the federal part of the HST paid or payable on each qualifying item;
• from the amount of the GST paid or payable on each eligible purchase or expense, or, if applicable, the federal part of the HST paid or payable on the qualifying items, subtract any ITC, other rebate, refund, or remission that you received or are entitled to receive for any of that amount. The result is the non-creditable GST charged for each purchase or expense; and
• add all the amounts of the non-creditable GST charged for the particular claim period. The total non-creditable GST charged will be used in Step 6 to calculate the PSB rebate of the GST and/or the federal part of the HST.

Step 5 – Calculate your federal non-creditable HST charged

To calculate your federal non-creditable HST charged in a particular claim period, do the following:

• list all the eligible purchases and expenses on which you paid the HST during that claim period at the rate of 13%, determine the amount of HST paid or payable on each eligible purchase or expense, and multiply this amount by the fraction 5/13;
• list all the eligible purchases and expenses on which you paid the HST during that claim period at the rate of 14%, determine the amount of HST paid or payable on each eligible purchase or expense, and multiply this amount by the fraction 5/14; and
• list all the eligible purchases and expenses on which you paid the HST during that claim period at the rate of 15%, determine the amount of HST paid or payable on each eligible purchase or expense, and multiply this amount by the fraction 5/15.

The result of each of the above calculations is the federal part of the HST paid or payable on each eligible purchase or expense.

• From the amount of the federal part of the HST paid or payable on each eligible purchase or expense, subtract any ITC, other rebate, refund, or remission that you received or are entitled to receive for any of that amount. The result is the federal non-creditable HST charged for each purchase or expense; and
• add all the amounts of the federal non-creditable HST charged for the particular claim period. The total federal non-creditable HST charged will be used in Step 6 to calculate the PSB rebate of the GST and/or the federal part of the HST.

Step 6 – Calculate your PSB rebate of the GST and/or the federal part of the HST

To calculate your PSB rebate of the GST and/or the federal part of the HST, do the following:

• add the total non-creditable GST charged that was calculated in Step 4 and the total federal non-creditable HST charged that was calculated in Step 5;
• multiply the total by 50% (the federal PSB rebate factor for charities); and
• enter the result on line 305 of Form GST66, under the header Federal.

For a full explanation of how to complete the rest of Form GST66, refer to Guide RC4034.

How to calculate your PSB rebate amount for line 305-ON on Form RC7066-SCH

Step 7 – Calculate your provincial non-creditable HST charged

To calculate your provincial non-creditable HST charged in a particular claim period, do the following:

• list all the eligible purchases and expenses on which you paid the HST during that claim period at the rate of 13%, determine the amount of HST paid or payable on each eligible purchase or expense, and multiply this amount by the fraction 8/13;
• list all the eligible purchases and expenses on which you paid the HST during that claim period at the rate of 14%, determine the amount of HST paid or payable on each eligible purchase or expense, and multiply this amount by the fraction 9/14; and
• list all the eligible purchases and expenses on which you paid the HST during that claim period at the rate of 15%, determine the amount of HST paid or payable on each eligible purchase or expense, and multiply this amount by the fraction 10/15.

The result of each of the above calculations is the provincial part of the HST paid or payable on each eligible purchase or expense.

• From the amount of the provincial part of the HST paid or payable on each eligible purchase or expense, subtract any ITC, other rebate, refund, or remission that you received or are entitled to receive for any of that amount. The result is the provincial non-creditable HST charged for each purchase or expense; and
• add all the amounts of the provincial non-creditable HST charged for the particular claim period. The total provincial non-creditable HST charged will be used in Step 8 to calculate the PSB rebate of the provincial part of the HST.

Step 8 – Calculate your PSB rebate of the provincial part of the HST

To calculate your PSB rebate of the provincial part of the HST, do the following:

• multiply the total provincial non-creditable HST charged that was calculated in Step 7 by 82% (the provincial PSB rebate factor for charities resident in Ontario); and
• enter the result on line 305-ON of Form RC7066-SCH, under the header Ontario.

For a full explanation of how to complete the rest of Form RC7066-SCH and Form GST66, refer to Guide RC4034.

Further information