How a Charity Completes Its GST/HST Return

GST/HST Info Sheet GI-066
October 2026

This version replaces the one dated February 2019. This info sheet has been updated to reflect new reporting lines on Form GST34, Goods and Services Tax/Harmonized Sales Tax (GST/HST) Return, when filing electronically using GST/HST NETFILE and My Business Account.

This info sheet explains how a charity that is a GST/HST registrant calculates its net tax and completes its GST/HST return.

Meaning of significant terms

Charity means a registered charity or registered Canadian amateur athletic association for income tax purposes, but does not include a public institution. A charity can issue official donation receipts for income tax purposes.

Exempt supplies are supplies of property and services that are not subject to the GST/HST. GST/HST registrants cannot claim input tax credits (ITCs) to recover the GST/HST paid or payable on purchases and expenses related to making such supplies. However, a charity may be eligible to claim a public service bodies' (PSB) rebate for such expenses.

Participating province means a province that has harmonized its provincial sales tax with the GST to implement the HST. Participating provinces include New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island, but do not include the Nova Scotia offshore area or the Newfoundland offshore area except to the extent that offshore activities, as defined in subsection 123(1), are carried on in that area.

Public institution means a registered charity for income tax purposes that is also a school authority, a public college, a university, a hospital authority, or a local authority determined to be a municipality by the Minister of National Revenue. For information on how the GST/HST applies to a public institution, refer to GST/HST Info Sheet GI-068, Basic GST/HST Guidelines for Public Institutions.

Registrant means a person that is registered or required to be registered for the GST/HST, but generally excludes a person that is registered or required to be registered under special rules applicable to digital economy businesses unless that person registered under those special rules begins carrying on business in Canada, requiring them to register under the regular rules that apply to most persons.

Supply means the provision of property or a service in any way, including sale, transfer, barter, exchange, licence, rental, lease, gift, and disposition.

Taxable supplies are supplies of property and services that are made in the course of a commercial activity and are subject to the GST/HST (including zero-rated supplies).

Zero-rated supplies are supplies of property and services that are taxable at the rate of 0%. This means there is no GST/HST charged on these supplies, but registrants can claim ITCs for the GST/HST paid or payable on purchases made and expenses incurred to provide them (other than most purchases made and expenses incurred by charities using the net tax calculation for charities).

Net tax calculation for charities

For registrants other than charities, net tax is generally any GST/HST collected or collectible by a person less any ITCs that the person is entitled to recover for the GST/HST paid or payable on its purchases and expenses. However, there is a different net tax calculation method specifically for charities that are registrants.

The net tax calculation for charities simplifies the way charities calculate their net tax as it generally removes the need for charities to allocate their purchases and expenses in relation to their taxable supplies and exempt supplies. A charity must use the net tax calculation for charities to determine its net tax unless it meets one of the exceptions listed under the heading "Exceptions to using the net tax calculation for charities".

To calculate its net tax for a reporting period using the net tax calculation for charities, a charity must follow the following three steps.

Step 1 – Determine the total GST/HST and adjustments for the reporting period

The total of the GST/HST and adjustments for the reporting period is reported on the GST/HST return as follows:

Line 103 – GST/HST collected or collectible in the reporting period

60% of the GST/HST the charity was required to charge, whether the charity collected it or not, on most taxable supplies, including taxable supplies for which point-of-sale rebates and Ontario First Nations point-of-sale relief were given by the charity in the reporting period

For most charities that are registrants, this is the only amount to be entered on line 103.

Occasionally, a charity will have to include additional amounts if it is involved in certain transactions. The additional amounts to be included in the total reported on line 103 are:

100% of the GST/HST collected or collectible on taxable sales of capital and real property (land or buildings), including deemed taxable sales of capital and real property
100% of the GST/HST deemed collected on property (other than capital property) or services appropriated to, or for the benefit of, a member or relative of a member of the charity (for example, an inventory item given to this person)
100% of the GST/HST deemed collected on any property or service that the charity provided to an employee that is a taxable benefit for income tax purposes
100% of the GST/HST collected or collectible on supplies of goods the charity made while acting as an agent (including a billing agent), or auctioneer and agent, of a person where the charity has to account for the tax
100% of any GST/HST collected in error

Line 104 - Adjustments to be added to the net tax

A charity should only fill out line 104 if it has to make adjustments to increase the amount of its net tax for the reporting period. A charity may make the following adjustments, which are reported on line 104 of the GST/HST return:

100% of all amounts required to be taken into account as the GST/HST by the charity because of the recovery of a bad debt for a taxable sale of capital property or real property
the amount of the GST/HST adjusted, refunded, or credited to the charity by the seller of capital property or real property to the extent that the amount was previously claimed by the charity as an ITC
any amount that the charity carried forward from designated reporting periods for which the charity received approval from the Canada Revenue Agency (CRA) to temporarily stop filing GST/HST returns for those periods in which its cumulative amount was $1,000 or less

Once the totals for lines 103 and 104 are entered, the total for line 105 is calculated.

Line 105 – Total GST/HST and adjustments for the period

This is the total of the amounts entered on lines 103 and 104.

If the charity is filing electronically using GST/HST NETFILE or My Business Account (through Sign in to your CRA account), the value for line 105 will automatically populate on the return.

If the charity is filing a paper copy of the return, it must manually add lines 103 and 104 and enter the total on line 105 of the return.

If the charity is filing using GST/HST TELEFILE, it only needs to populate line 105 of the return.

In general, charities using the net tax calculation for charities are not required to account for the GST/HST in respect of amounts that they receive under warranty claims or as rebates from manufacturers or other vendors.

Charities also do not have to account for the GST/HST if, as creditors, they seize personal property and take it for their own use.

Step 2 – Determine the total ITCs and adjustments

Charities that use the net tax calculation for charities cannot claim, as ITCs, most of the GST/HST paid or payable on their purchases and expenses (even if they relate to taxable supplies). Therefore, in most cases, line 106 of the GST/HST return will be zero.

However, there are some situations where a charity may claim an ITC or make an adjustment to the net tax for the reporting period.

Line 106 – GST/HST paid or payable (ITCs)

A charity may claim the following ITCs, which are reported on line 106 of the GST/HST return:

100% ITCs for the GST/HST paid or payable on the charity's purchases of, or improvements to, capital property or real property for use primarily (more than 50%) in the charity's commercial activities, including the deemed GST/HST payable when capital property is brought into a participating province for use primarily in its commercial activities
any ITC for the GST/HST paid or payable on the charity's purchase of, or improvement to, real property based on the percentage of use of the real property in the charity's commercial activities (must be more than 10%) and for which it filed Form GST26, Election or Revocation of an Election by a Public Service Body to Have an Exempt Supply of Real Property Treated as a Taxable Supply, that is effective the day the property is acquired
any ITC for the GST/HST considered paid on the deemed purchase of real property based on the percentage of use of the property in the charity's commercial activities (must be more than 10%), where the election (Form GST26) takes effect on a day other than the day the property was acquired by the charity or the day the charity becomes a registrant
100% ITCs for the GST/HST paid or payable on goods that the charity acquired, imported, or brought into a participating province that will be sold by a person acting as an agent (including a billing agent), or an auctioneer and agent, for the charity
100% ITCs for the GST/HST paid on goods imported by the charity on behalf of a non-resident person for use exclusively in the charity's commercial activities and sold when the charity was acting as an agent, or auctioneer and agent, for the non-resident person
100% ITCs that the charity was entitled to claim and that it carried forward from a reporting period when it did not have to use the net tax calculation for charities

Line 107 – Adjustments to be deducted when determining the net tax

A charity should only fill out line 107 if it has to make adjustments to decrease the amount of its net tax for the reporting period. A charity may make the following adjustments, which are reported on line 107 of the GST/HST return:

60% of the total of the GST/HST adjustments (for example, for price reductions, for rebates for foreign conventions, and for artistic works produced for export) or of point-of-sale rebates for the provincial part of the HST that the charity gave in the reporting period (no amount should be included for any Ontario First Nations point-of-sale relief credited in the reporting period as the charity may claim this amount by filing Form GST189, General Application for GST/HST Rebates, using code 23)
60% of the total tax amount of a tax adjustment note issued by the charity in the reporting period to a pension entity
the GST/HST adjusted, refunded, or credited in a credit note issued by the charity in the reporting period for tax charged in excess of the GST/HST collectible on certain supplies of property or services
GST/HST adjustments relating to bad debts written off during the reporting period in respect of sales of capital property or real property
the GST/HST adjusted, refunded, or credited in a credit note issued by the charity in the reporting period in respect of sales of capital property or real property
GST/HST adjustments relating to the GST/HST new housing rebate where the charity is a builder and paid or credited the rebate to an individual who purchased new housing

Once the totals for lines 106 and 107 are entered, the total for line 108 is calculated.

Line 108 – Total ITCs and adjustments

This is the total of the amounts entered on lines 106 and 107.

If the charity is filing electronically using GST/HST NETFILE or My Business Account (through Sign in to your CRA account), the value for line 108 will automatically populate on the return.

If the charity is filing a paper copy of the return, it must manually add lines 106 and 107 and enter the total on line 108 of the return.

If the charity is filing using GST/HST TELEFILE, it only needs to populate line 108 of the return.

Step 3 – Determine the net tax

Subtract the total in Step 2 (line 108) from the total in Step 1 (line 105). The result is the charity's net tax. The amount should be entered on line 109 of the charity's GST/HST return.

If the charity is filing electronically using GST/HST NETFILE or My Business Account (through Sign in to your CRA account), or using GST/HST TELEFILE, the value for line 109 will automatically populate on the return.

If the charity is filing a paper copy of the return, it must manually subtract line 108 from line 105 and enter the amount on line 109 of the return.

Line 111 – Offset of GST/HST rebates

A charity that is a registrant can offset the net tax it owes on its GST/HST return, or increase any refund, with certain GST/HST rebates to which it is entitled. For example, a charity is entitled to claim a PSB rebate to recover a percentage of the GST/HST paid or payable on eligible purchases and expenses. For more information, refer to Guide RC4034, GST/HST Public Service Bodies' Rebate.

If a charity that is a registrant wants to use its PSB rebate to reduce any amount it owes on a GST/HST return, or to increase any refund, it must file its PSB rebate application along with the return. For more information on offsetting the amount of a rebate on a GST/HST return, refer to Guide RC4022, General Information for GST/HST Registrants.

The amount reported on line 111 is added to any amount reported on line 110 (instalments and other payments) and totalled on line 112.

To determine a charity's final GST/HST refund or amount owing, the amount reported on line 112 is subtracted from the amount on line 109. If the difference is negative, the amount is entered on line 114. This is the charity's refund. If the amount is positive, the amount is entered on line 115. This is the charity's amount owing.

If the charity has GST/HST to report on the purchase of real property or purchases of emission allowances on line 205 of the GST/HST return or GST/HST to be self assessed on line 405 of the GST/HST return, this will affect the amount reported on line 114 or 115. For more information on the self assessment rules, refer to Guide RC4022.

Exceptions to using the net tax calculation for charities

Public institutions

A public institution cannot use the net tax calculation for charities.

Designated charities

A designated charity is a charity that has applied for designation and has been designated by the Minister of National Revenue to have certain exempt services it provides made taxable. To qualify for this designation, a charity must meet both of the following conditions:

one of the main purposes of the charity is to provide employment or employment related assistance to individuals with disabilities
the charity supplies, on a regular basis, certain services that are performed, in whole or in part, by individuals with disabilities

A designated charity cannot use the net tax calculation for charities.

Election not to use the net tax calculation for charities

A charity that meets any of the following conditions can elect not to use the net tax calculation for charities:

the charity makes supplies outside Canada in the ordinary course of its business
the charity makes zero-rated supplies (for example, basic groceries, certain medical devices) in the ordinary course of its business
90% or more of the charity's supplies are taxable supplies (the 90% or more calculation is based on the number of supplies made by the charity, not the amount of revenue from those supplies)

Once a charity elects not to use the net tax calculation for charities, it will not subsequently be forced to use the net tax calculation for charities if its circumstances change, such as if it were no longer to make zero-rated supplies, or if it were to begin to make a greater percentage of exempt supplies. Therefore, once a charity has made this election, it does not have to keep track of whether it is still making supplies outside Canada, making zero-rated supplies in the course of its business, or the extent to which it still makes taxable supplies.

To make the election, the charity must submit a completed Form GST488, Election or Revocation of an Election Not to Use the Net Tax Calculation for Charities. Eligible charities with annual reporting periods have to file this form on or before the first day of the second fiscal quarter of the fiscal year for which the election will be in effect (for example, on or before April 1, if the charity's fiscal year begins on January 1). In other cases, the form must be filed on or before the date a return has to be filed for the first reporting period for which the election is in effect.

The charity's head office should make this election. Once made, it is binding on the legal entity. All branches that are part of one legal entity are required to use the same method of accounting for net tax.

For a list of GST/HST forms, go to GST/HST-related forms and publications, or call 1‑800‑959‑5525.

Revoking the election

The election not to use the net tax calculation for charities remains in effect until a request for its revocation is filed. A charity can revoke its election no earlier than one year after the election takes effect by submitting a completed Form GST488. The charity is required to file this form on or before the due date of the GST/HST return for the last reporting period during which the election is in effect. Once a charity revokes the election, it will have to use the net tax calculation for charities.

Charities that have elected not to use the net tax calculation for charities, designated charities, and public institutions follow the regular method to calculate the net tax on their GST/HST returns. Information on the regular method for calculating net tax can be found in Guide RC4022.

How often must a charity file a GST/HST return

A charity that is a registrant is required to complete and file a GST/HST return for each of its reporting periods either by paper, by GST/HST TELEFILE or the CRA's online services such as GST/HST NETFILE or My Business Account and Represent a Client (through Sign in to your CRA account).

The CRA encourages all registrants to file their returns electronically and no longer sends a personalized GST/HST return package to new registrants unless one is requested.

If the charity files a paper return, it can use either Form GST34 2, Goods and Services Tax/Harmonized Sales Tax (GST/HST) Return for Registrants, or Form GST62, which is the non-personalized version of Form GST34‑2. A charity that wishes to have a personalized return (Form GST34-2) package sent to it can request one through My Business Account or Represent a Client (through Sign in to your CRA account), or by calling the CRA at 1‑800‑959‑5525.

A charity registering for GST/HST purposes is assigned an annual reporting period regardless of its revenues. This means that most charities registered for GST/HST purposes file a GST/HST return once a year to report their net tax.

A charity that wishes to change its reporting period and file monthly or quarterly GST/HST returns can do so electronically by using My Business Account or Represent a Client (through Sign in to your CRA account), by submitting a completed Form GST20, Election for GST/HST Reporting Period, or by calling the CRA at 1‑800‑959‑5525.

Public service bodies' rebate

A charity is entitled to claim a PSB rebate to recover a percentage of the GST/HST paid or payable on eligible purchases and expenses for which it cannot claim ITCs or any other rebate, refund, or remission. For more information, refer to the following publications:

For information to assist a charity in determining in which province(s) it is resident, refer to GST/HST Info Sheet GI-121, Determining Whether a Public Service Body is Resident in a Province for Purposes of the Public Service Bodies' Rebate.

Example

A charity resident in Ontario operates week-long overnight summer camps in Ontario for children aged 8 to 12. The charity is registered for GST/HST purposes, is an annual filer, and is required to use the net tax calculation for charities. The HST is collectible on the fees to attend the summer camps. During its reporting period, the charity built a new dining hall for use only by the campers. The charity also operates a gift shop where it makes taxable sales to the campers. The charity did not credit any point-of-sale rebates or Ontario First Nations point-of-sale relief in the reporting period.

The charity's revenues and expenses are as follows:

Charity's revenues
Type of revenue	Amount	HST collected
Overnight camps	$300,000	$39,000
Donations	$250,000	$0
Gift shop sales	$4,000	$520

The total HST collected by the charity during the reporting period is $39,520 ($39,000 + $520).

Charity's expenses
Type of expense	Amount	HST paid
Salaries	$50,000	$0
Gift shop inventory	$3,000	$390
Bank charges	$600	$0
Expenses relating to the construction of the dining hall	$150,000	$19,500
Food purchases	$17,500	$0
Utilities	$3,500	$455
General expenses	$2,000	$260

The total HST paid by the charity during the reporting period is $20,605 ($390 + $19,500 + $455 + $260).

The charity calculates its net tax as follows:

Step 1 - Determine the total GST/HST and adjustments for the reporting period

$23,712 (which is 60% of the $39,520 HST collected) is entered on line 103 of the GST/HST return.

Step 2 - Determine the total ITCs and adjustments

$19,500 is entered on line 106 of the GST/HST return. The charity is eligible to claim an ITC for the HST paid on the construction of the dining hall as the real property, including the hall, is used solely by the charity for making taxable supplies. The charity is not entitled to any other ITCs on the HST it paid.

Step 3 - Determine the net tax

$4,212 ($23,712 – $19,500) is entered on line 109 of the GST/HST return. This amount is the charity's net tax before any rebate.

PSB rebate calculation

The remaining HST paid of $1,105 (total HST paid of $20,605 less ITC of $19,500) on the other expenses is not eligible for an ITC under the net tax calculation for charities. However, the charity is eligible to claim a PSB rebate of 50% of the federal part of the HST paid on its other expenses in the amount of $212.50 ($1,105 × 5/13 × 50%). As the charity is resident in Ontario, it is also entitled to claim a PSB rebate of 82% of the provincial part of the HST paid on those expenses in the amount of $557.60 ( $1,105 × 8/13 × 82%) for a total PSB rebate claim of $770.10.

The charity may include this amount on line 111 of its GST/HST return to reduce its net tax owing, provided the GST/HST return and the PSB rebate application are filed and sent together.

Therefore, where the charity files and sends its GST/HST return together with its PSB rebate application, the following amounts will be entered on its GST/HST return:

Line 101 (Sales and other revenue): $554,000
Line 105 (Total GST/HST and adjustments for the period): $23,712
Line 108 (Total ITCs and adjustments): $19,500
Line 109 (Net tax): $4,212
Line 111 (Rebates): $770.10
Line 113 A (Balance): $3,441.90
Line 115 (Payment enclosed): $3,441.90

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2026-10-07