Does the requirement that a charity be resident in Canada require that a majority of its board of directors be Canadian residents for income tax purposes?
A. Section 248(1) of the Income Tax Act requires that a registered charity reside in Canada, and that it be created or established in Canada. However, how the rules concerning residency apply differs according to the way the charity has been structured. For example, whether it is incorporated or governed by a legal document that creates a trust or by a constitution, and whether it is “a branch, section, parish, congregation or other division of an organization”. The residency requirement for charities and some other rules, notably those dealing with charities having to keep books and records in Canada or with restricting fund transfers to qualified donees only, suggest that registered charities ought to have a significant Canadian presence. However, in the case of corporations, the general provisions of the Income Tax Act concerning corporate residency (ss 250(4)) deem any corporation (charitable or not) to be residing in Canada simply if it was incorporated in Canada. If there is no i
