There have been changes to the disbursement quota (DQ) for registered charities effective as of January 1, 2023. The following is brief summary of these changes:
- On the portion of property exceeding $1 million, the DQ rate increased from 3.5% to 5%. For property equal to or less than $1 million, the DQ rate remains at 3.5%.
- The Canada Revenue Agency (CRA) has discretion to grant a reduction in a charity’s DQ obligation for any particular tax year, and the CRA can also publicly disclose information related to such a decision.
- The CRA is no longer accepting requests to accumulate property. Previously approved property accumulation agreements are still valid until the expiry of the approved period.
If you have any questions regarding these changes or the disbursement quota in general, please contact one of our lawyers to assist.
*Please be advised that the above is general information and does not constitute legal advice. Please contact our firm if you have any questions.