There are many questions and issues with the new qualifying disbursement and anti-avoidance rules. One of those questions related to reporting and the T3010. CRA has put out a note today on this.
We are generally suggesting to organizations to avoid using the qualifying disbursement rules unless absolutely necessary until there is greater clarity and CRA has finalized their guidance. We have discussed the qualifying disbursement and anti-avoidance rules elsewhere (here and here).
Here is the note that I received today from CRA:
Reporting grants to non-qualified donees
On November 30, 2022, the Charities Directorate published draft guidance on registered charities making grants to non-qualified donees. We appreciate your feedback and look forward to providing you with a final version of the guidance soon. If you would like to provide feedback on the guidance, you have until January 31, 2023, to do so.
The rules for making grants to non-qualified donees have been in effect since June 23, 2022, and we understand you might need to file your T3010 return soon. We are currently updating Form T3010, Registered Charity Information Return, and the accompanying guide T4033, which we expect to make available in spring 2023.
Until the form and guide are updated, you are not required to report your granting activities.
You must, however, keep adequate books and records to support all granting activities. Your books and records must contain enough information to allow the CRA to assess whether your charity is operating in accordance with the Income Tax Act.
For more information about these rules, see Guidance CG-032, Registered charities making grants to non-qualified donees (draft).
If you have any questions about the new requirements, please call our client service team at 1‑800‑267‑2384. Our representatives are available to help you Monday through Friday, 9 am to 5 pm, local time.
Sincerely,
Sharmila Khare
Director General
Charities Directorate
Canada Revenue Agency