5 January 1995 External T.I. 9429335 - CHARITABLE DONATIONS- KOSHER

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

PRINCIPAL ISSUE:

Whether the purchase of kosher-approved food products from various retailers constitutes a charitable donation?

Position TAKEN:

Not a charitable donation

Reasons FOR POSITION TAKEN:

It does not constitute an outright gift, nor is it a gift to a registered charity, and official receipts have not been submitted.

				5-942933

XXXXXXXXXX		L. Roy

January 5, 1995

Dear XXXXXXXXXX:

Re: Charitable Donations - Kosher Food Products

This is in reply to your letter of September 1994 in which you requested explanation on the ineligibility as charitable donation of extra cost on products that were labelled Kosher.

Subsections 118.1(2) and (3) of the Income Tax Act (the "Act") permit a deduction from tax payable, within specified limits, for gifts made to registered charities, if supported by official receipts issued in accordance with the Regulations. As indicated in paragraph 3 of Interpretation Bulletin IT-110R2 (a copy of which is enclosed), a gift is a voluntary transfer of property without valuable consideration. A gift can be said to have been made where all of the following conditions are satisfied:

(a)property (usually cash) is transferred by a donor to a registered charity;

(b)the transfer is voluntary; and

(c)no consideration or benefit accrues to the donor or to anyone designated by the donor as a result of the transfer.

In the situation of extra cost on products labelled Kosher, a gift would not be considered to have been made since none of the above conditions are satisfied. The first condition is not met as the purported donation is made to retailers of kosher-approved food products which are not registered as charities; the second condition is not met as the purported cash donation is part of the cost of the food products and is not made voluntarily; and the third condition is not met as the purported donation is not without consideration since you receive food products in exchange for your donation. Furthermore, according to subsection 118.1(2) of the Act, charitable donations must be supported by official receipts.

Consequently, since the purported donations do not constitute a gift and since no official receipts support such a claim for charitable donations, a deduction cannot be claimed under subsection 118.1(3) of the Act.

We trust the above comments will be of assistance to you.

Yours truly,

for Director
Financial Industries Division
Rulings Directorate
Policy and Legislation Branch