Are you a non-profit organization, a charity, or a government entity in Canada? If so, you may be familiar with the term Public Service Body (PSB). As a PSB, you may be eligible for certain tax exemptions and refunds that can help your organization save money. In this blog post, we’ll cover everything you need to know about PSBs, including what they are, how they’re defined, and what tax benefits they offer.

What is a Public Service Body (PSB)?

A Public Service Body (PSB) is a type of organization that is generally exempt from paying certain taxes. These organizations are typically non-profit organizations, charities, and government entities. PSBs are defined in the Excise Tax Act (ETA) and are subject to specific rules and requirements.

How are PSBs defined?

PSBs are defined in section 123 of the ETA as an organization that is:

  • a charity, non-profit organization, municipality, school authority, or hospital authority;
  • all or substantially all of its activities are in the public interest and not for profit; and
  • it receives significant funding from the government, either directly or indirectly.

There are some exceptions to this definition, but these are the general requirements for an organization to be considered a PSB.

What tax benefits do PSBs offer?

As a PSB, your organization may be eligible for certain tax exemptions and refunds. Here are a few examples:

  • Exemption from paying GST/HST on most goods and services: As a PSB, you’re generally exempt from paying GST/HST on most goods and services that you purchase. This can result in significant cost savings for your organization.
  • Refunds for GST/HST paid on eligible purchases: Even if you pay GST/HST on certain purchases, you may be able to claim a refund for these taxes. For example, if you purchase goods or services that are used exclusively for your organization’s non-commercial activities, you may be eligible for a refund of the GST/HST paid.
  • Rebates for GST/HST paid on certain expenses: In some cases, you may be eligible for a rebate of the GST/HST paid on certain expenses. For example, if your organization purchases fuel or electricity for use in its activities, you may be eligible for a rebate of the GST/HST paid.

It’s important to note that there are specific rules and requirements that must be followed in order to qualify for these tax benefits. For example, you must be registered for GST/HST and you must keep detailed records of your organization’s activities and expenses.

In conclusion, as a PSB, you may be eligible for certain tax exemptions and refunds that can help your organization save money. If you’re not sure if your organization qualifies as a PSB or how to apply for these tax benefits, it’s important to seek professional advice from a tax expert or accountant.