Tax Changes To Non-Profit Organizations Likely

Paragraph 149(1)(l) of the Income Tax Act (Canada) exempts from Canadian federal income tax a range of clubs, societies and associations commonly referred to as non-profit organizations (NPOs).

To qualify for the paragraph 149(1)(l) exemption (which has changed very little since 1917):

1. the organization must be a club, society or association;
2. the organization must not be a charity in the opinion of the Minister of National Revenue;
3. the organization must be organized and operated exclusively for purposes other than profit; and
4. no part of the organization's income may be payable to or otherwise available for the personal benefit of any member or shareholder of the organization.