Targeting The Tax Incentives

The terms "non-profit organizations" and "not-for-profit organizations" (NPOs) are used to describe entities that receive preferential treatment under the Income Tax Act, whereby the income they earn is generally not subject to income tax. In order to remain exempt, an NPO must meet all the following conditions:

• it must be a club, society or association
• it must not be a registered charity (which has its own set of rules)
• it must be organized and operated exclusively for social welfare, civic improvement, pleasure, recreation, or any other purpose except profit
• income generated by the NPO must not be payable or available for the personal benefit of any proprietor, member or shareholder.