BLC 2019 2019-11-02 You will be able to: • Understand who is responsible for compliance • Describe the differences between a non-profit and a charity Just Do It! • Identify and describe different types of compliance Financial • Understand annual financial and reporting Compliance Basics requirements • Understand and utilize different tools to assist with compliance Nov 02, 2019 What is Compliance Responsibilit A PROCESS of making sure your organization, y volunteers and employees follow the laws, rules, regulations, standards and ethical practices that apply Who needs to do it? to your context. 1
BLC 2019 2019-11-02 Board of Directors Framewor Board of directors are legally accountable and responsible i. Directors are the “guiding” minds ii. Obligated to use authority accordingly k iii. And “manage” the organization’s affairs As a director, you are a fiduciary that can be legally responsible for the decisions or Non-profit or charity? actions taken or not taken. Duty of Care Duty of Duty to Act Loyalty Within Scope How is your organization What is Your Framework? registered? Topic NPO Registered charity • can operate for social welfare, civic • must be established and operate exclusively for Purposes improvement, pleasure, sport, recreation, charitable purposes A designation or any other purpose except profit given by • does not have to go through a • must apply to the CRA and be approved for Registration Province of Canada Registered registration process for income tax registration as a charity Non-Profit Alberta Revenue Charity purposes (usually) Agency to • is not issued a charitable registration • is issued a charitable registration number once Charitable registration issue tax number number approved by the CRA receipts • cannot issue official donation receipts for • can issue official donation receipts for income Tax receipts income tax purposes tax purposes • may have to file a T2 return (if • must file an annual information return (Form Returns incorporated) or an information return T3010) within six months of its fiscal period-end (Form T1044) or both within six months of its fiscal period-end How can you find out how your organization is • is generally exempt from paying income • is exempt from paying income tax Tax exempt status tax registered? • may have to pay tax on property income or on capital gains 2
BLC 2019 2019-11-02 Some of the Compliances to Understand External Compliance GST Service Alberta – Registrar of Corporations Gaming License Income Tax Employment Standards Liquor Licence Human Rights Payroll/CPP/EI Funding Agreements Charitable Organization Registration Charities Directorate What is common to all of you…. Funders Food Handling Commercial Kitchens Canadian Anti Spam Legislation CASL Provincial Compliances Focus on 1. Society Annual Returns Risk 2. Bylaws and Bylaw Changes Registration and Tax 3
BLC 2019 2019-11-02 1. Society Annual Returns Timeline for Annual Return : Incorporation Date: May 16, 1982 Fiscal Year End Date: January 31 What is it? – annual “registration” of your organization Society Return Date: June 30 Annual Society What does it include: Fiscal General Annual • Society Annual Return Form (signed) Year End Meeting Return • Official List of Directors and Officers Birthday • Financial Statements • Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Comparative Financial Statements that have been approved at an AGM When Is it Due? – On or before the last day of the month after your 5-8 weeks to get All forms and Audited anniversary month audited financials Financials ready financials organized for approval by filed! members Timeline for Your Annual Return : There is a Form for That! What Are Your Dates? Incorporation Date _____________________________________ Fiscal Year End Date ____________________________________ Month End Your Society Return Is Due _____________________ https://www.alberta.ca/registration-forms- Indicate the dates on the timeline below: businesses-non-profits.aspx#toc-4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Did You know? There is also a form to change your directors. 4
BLC 2019 2019-11-02 2. Bylaws and Bylaw Changes Canada Revenue Agency Compliances What is it? 1. Taxes Bylaws are your legal documents. If you change them you must file them with Service Alberta and CRA if you are a charity. 2. GST What does it include: A signed resolution approving the changes 3. Payroll – EI and CPP When Is it Due? Whenever you change your bylaws. They don’t become official until they are filed and are returned to you “stamped”. 1. Taxes 2. GST - Simplified Non-profit Charity T2 T3010 • Rules are different for charities and non-profits Six months of fiscal year end Six months after fiscal year end • GST comes in two forms: De-registration after 6 months no late filing penalties • Rebates T1044 • Collect and remit (must register) Filed with T2 • CRA publishes a GST handbook for Non-Profits and one for (if investment income over $10,000; or, assets exceed $200K – once you file you always have to file) Charities late fee $25 per day to a maximum of $2500 5
BLC 2019 2019-11-02 GST – Simplified Con’t GST – Simplified Con’t Things to consider: Type of GST Refund Collection and • Memberships – if you add value to a membership, beyond a vote, newsletter and access to participate Organization Remittance of GST in programs you must charge GST, if you are registered for GST (e.g. up to 30% of membership value is No GST refund unless a Must register if “revenues” exceed acceptable but anything beyond will require GST) $50,000 and remit quarterly “public service body” Non-profit GST remitted is then reduced by “input tax credits” (40% of total revenue is from Nuances on what is taxed (i.e. program for kids government sources then 50% rebate) under age 14 are never taxed) • Sponsorships may be exempt from GST but it depends!: FINES will be levied for failure to remit on time! • being named the “sponsor” of a reception is exempt • receiving trade show booths at a reduced cost may not be exempt 50% Must register if “revenue” exceeds $250,000 Charity Know the GST Rules – there are fines if you fail to comply! Employee or Self-employed? 3. Payroll INITIAL steps to help make the distinctions “What are the differences between • “The level of control the payer has over the worker’s activities; • Whether the worker provides the tools and equipment; hiring employees and hiring contractors?” • Whether the worker can subcontract the work or hire assistants; • The degree of financial risk the worker takes; • Contract OF service (employee) • …responsibility for investment and management …worker holds; • The worker’s opportunity for profit ; and VS • Any other relevant factors, such as written contracts .” • Contract FOR services (contractor) 6
BLC 2019 2019-11-02 Payroll Con’t When is Payroll Remittance Due? Issuing T4’s The Average monthly withholding amount (AMWA) decides your Both require them (employee – T4; contractors T-4A) remitter type • Your AMWA is the total of all the Canada Pension Plan (CPP), Remitting payroll (source) deductions employment insurance (EI), and income tax you had to remit for • You are responsible for both the employer’s and employee’s share the year, divided by the number of months (maximum 12) that • Monthly source deductions for employees you had to remit for. CPP EI Income Tax Remitting frequency, remitting periods and Payroll Remittance Dates - Penalties remittance due dates by remitter type Failure to take deductions or to remit: Remitter Remitting type frequency AWMA Remitting period Remittance due dates • Penalty of 10% of the amount of CPP, EI and income tax you did Quarterly Quarterly Less than $25,000 January 1 to March 31 April 15 not deduct (Example 1) April 1 to June 30 July 15 July 1 to September 30 October 15 • Increases if you have more than one penalty in a year – 20% October 1 to December 31 January 15 Regular Monthly Less than $1,000 and Calendar months 15th day of the next month • If you don’t comply, you can be prosecuted – fine $1K - $25K or (Example 2) less than $3,000 fined and imprisoned up to 12 months Threshold 1 Up to twice a $25,000 to $99,999 1st to 15th of the month 25th day of same month accelerated month 16th to end of the month 10th day of the next month • If you deduct but do not remit: (Example 3) Threshold 2 Up to four times 1st to 7th of the month 3rd working day after the 7th $100,000 or more • 3% if the amount is one to three days late; accelerated a month 8th to 14th of the month 3rd working day after the 14th • 5% if it is four or five days late; (Example 4) 15th to 21st of the month 3rd working day after the 21st 22nd to the last day of the 3rd working day after the last d • 7% if six or seven days late; an month ay of the month • 10% if it is more than 7 days late, or if no amount is remitted 7
Recommend
More recommend
