Just as giving to charity is important to individuals from a philanthropic and tax perspective, so too are corporate charitable gifts.

With government funding to charitable organizations continuing to be reduced, ensuring and encouraging other taxpayers, such as corporations, to contribute, can be achieved where there are also tax savings and benefits to the corporations.

This bulletin summarizes the tax benefits and consequences that can be realized by a private corporation from its charitable donations.

A corporation that donates to a recognized charity is able to deduct from its net income the amount of its donation – as evidenced by the donation receipt issued by a recognized charitable organization.

The value of a corporation’s deduction will vary depending upon:

• The type of corporation (i.e. public, private or Canadian-controlled private corporation (CCPC));
• The type of income it earns (active business, manufacturing and processing, or investment); and
• The province where it carries on its income-earning activity(ies).