Canada Revenue Agency (CRA) conducts an annual review to see how
organizations which claim the tax exemption under paragraph 149 (1)
(l) of the Income Tax Act
(the Act) operate. It is not an audit, but
helps CRA see where issues exist and create programmes that may, in
the end, make it easier for organizations to understand the rules
and remain in compliance.
Who Qualifies for Tax Exempt Status?
Paragraph 149(1)(l) applies only to those organization that
are:
- a club, as society or other association;
- that is not a registered charity under section 149.1;
- that operates exclusively for society welfare, civic
improvement, pleasure or recreation.
Furthermore, the organization may not make a profit, and must
not benefit any proprietor, member or shareholder. There is an
exception for a proprietor, member or shareholder which is itself a
club, a society or other association promoting amateur
athletics.
