Question 1

Are sponsorship fees tax-deductible in Canada?

Accepted Answer

Sponsorship fees are generally deductible as advertising or promotion expenses under the Income Tax Act, but they are NOT charitable donations and no tax receipt should be issued unless through a registered charity.

Question 2

Is GST/HST charged on sponsorship fees?

Accepted Answer

Yes, sponsorship fees are considered a taxable supply and are subject to GST/HST. The sponsor can claim input tax credits (ITCs) if registered for GST/HST.

Question 3

Does CASL apply to sponsorship communications?

Accepted Answer

Yes, Canada's Anti-Spam Legislation (CASL) applies to commercial electronic messages sent as part of sponsorship activities. Express consent or an existing business relationship is required.

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