Changes to the Disbursement Quota Rules for Charities

Posted on March 22nd, 2023 in Not-for-Profit

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On December 15, 2022, Bill C-32, Fall Economic Statement Implementation Act, 2022, received Royal Assent. As a result, there have been changes to the Disbursement Quota (DQ) rules for charities.

As of January 1, 2023, the following came into effect:

On the portion of property exceeding $1 Million, the DQ rate increased from 3.5% to 5%. For property equal to or less than $1 Million, the DQ rate remains at 3.5%.
The Canada Revenue Agency (CRA) has discretion to grant a reduction in a charity’s DQ obligation for any particular tax year, and the CRA can also publicly disclose information related to such a decision.
The CRA is no longer accepting requests to accumulate property. Previously approved property accumulation agreements are still valid until the expiry of the approved period.

Read more about the changes here: C-32 (44-1) – Parliament of Canada.