A Canadian Cash Receipt (or Donation Receipt) is a formal document issued by an organization to acknowledge receipt of a charitable contribution and provide the donor with documentation for tax purposes. In Canada, the donation tax credit system is governed by section 118.1 of the Income Tax Act (R.S.C. 1985, c. 1, 5th Supp.), which allows individuals to claim a non-refundable tax credit for gifts made to registered charities, registered Canadian amateur athletic associations, registered journalism organizations, and other qualified donees listed under section 149.1.

The Canada Revenue Agency (CRA) sets strict requirements for official donation receipts. Under CRA guidelines and Regulation 3501 of the Income Tax Regulations (C.R.C., c. 945), a donation receipt must contain prescribed information including the charity’s registration number, the donor’s name and address, the date of donation, the eligible amount, and a statement confirming no goods or services were exchanged. Receipts that do not meet these requirements may be rejected by the CRA, resulting in the denial of the donor’s tax credit claim.

The distinction between a general cash receipt and an official donation receipt is important. Any organization can issue a general receipt acknowledging that it received funds or goods. However, only organizations registered as charities with the CRA under section 149.1 of the Income Tax Act can issue official donation receipts that entitle the donor to the donation tax credit. Issuing false or misleading donation receipts is an offence under the Income Tax Act that can result in penalties, revocation of charitable status, and criminal prosecution.

A Canadian donation receipt is needed whenever a donor contributes cash, cheque, electronic transfer, or property to a registered charity and wishes to claim the donation tax credit on their federal and provincial income tax return. The federal credit is 15% on the first $200 of eligible donations and 29% on amounts exceeding $200 (with a 33% rate available for high-income taxpayers). Most provinces provide an additional provincial donation tax credit, resulting in combined tax savings of approximately 40% to 50% for donations above $200.

For non-cash gifts (gifts in kind), the receipt is essential because it documents the fair market value of the donated property at the time of the gift. Under CRA policy, if the fair market value of a non-cash gift exceeds $1,000, the charity must obtain an independent appraisal. For gifts of ecologically sensitive land under the Ecological Gifts Program (section 110.1(1)(d) of the Income Tax Act), special rules apply and the fair market value must be determined by Environment and Climate Change Canada.

Businesses that make charitable donations deduct them under section 110.1 of the Income Tax Act rather than claiming the individual tax credit under section 118.1. Corporations can deduct eligible gifts up to 75% of their net income for the year. The donation receipt provides the required documentation for the corporate tax deduction.

Non-profit organizations that are not registered charities (such as community clubs, industry associations, or political organizations) should still issue general receipts for cash received to maintain proper accounting records and provide donors with proof of payment, even though these receipts do not qualify for the donation tax credit.

A valid Canadian donation receipt under CRA guidelines must include the organization’s full legal name as registered with the CRA, the CRA registration number (in the format 123456789 RR 0001), and the organization’s mailing address. The donor’s full legal name and address must be listed exactly as they appear on the donor’s tax records to ensure the CRA can match the receipt to the tax return.

The receipt must state the date the donation was received, the location (city and province) where it was received, and the date the receipt was issued. A unique serial number must be assigned to each receipt for tracking purposes. The eligible amount of the gift in Canadian dollars must be clearly stated. If the donor received any advantage (goods, services, or other benefits) in return for the donation, the fair market value of that advantage must be disclosed and the eligible amount reduced accordingly.

For non-cash gifts, the receipt must include a description of the donated property, the name and address of the appraiser (if an appraisal was obtained), and the appraised fair market value. Under the Income Tax Act, the donor is deemed to have disposed of the donated property at fair market value, which may trigger a capital gain. However, for gifts of publicly listed securities to qualified donees, the capital gains inclusion rate is zero, making this a highly tax-efficient form of charitable giving.

The receipt must include a statement that it is an official receipt for income tax purposes and must bear the signature of an authorized individual within the organization. For electronic receipts, the CRA requires that the receipt contain all prescribed information and be issued in a format that cannot be easily altered. The organization must maintain copies of all issued receipts for a minimum of two years after the calendar year in which the donations were received.