Beginning with the 2013 taxation year, a corporation,
partnership or self-employed individual earning income from one or
more Internet webpages or websites must comply with certain
reporting requirements and must file certain forms along with their
Income generating webpages or websites must be disclosed,
whether hosted inside or outside Canada. If the entity or
individual has more than five webpages or websites, only the five
top income generators must be disclosed. The types of
webpages or websites to be disclosed include the following:
Webpages or websites where the business' goods and/or
services are sold. For example, those that have a shopping
cart, where payment transactions are processed by the business or
through a third-party service;
Webpages or websites that do not support transactions but that
allow customers to call, complete, and submit a form, or email the
business to make a purchase, order or booking;
Webpages or websites operated by third parties that allow the
business to sell goods and/or services on auction or
Webpages or websites that allow the business to earn income from
advertising, income programs, or traffic generated by the site,
- static advertisements placed by the business on its site for
- affiliate programs
- advertising programs such as Google AdSense or Microsoft
- other types of traffic programs; or
Blogs, auction, market place or any other portal or directory on
which the corporation/partnership/individual has created a profile
describing the business and from which it earns income.
Webpages and websites that provide contact information for a
business and information-only webpages and websites need not be
disclosed. In addition to disclosing the address of the
webpage or website, the gross income received from all Internet
business activities also has to be reported as a percentage of the
business' total gross income.
Corporations will report the income they earn from one or more
webpages or websites on newly-released Schedule 88, "Internet
Business Activities", which must be filed along with their
corporate income tax return (T2) beginning with the 2013 taxation
year. Individuals will report their Internet business
activities on the following forms, as applicable:
Form T2125, Statement of Business or Professional Activities
Form T2121, Statement of Fishing Activities
Form T2042, Statement of Farming Activities
These new compliance measures are not surprising, given the
challenges experienced by tax authorities around the world in
tracking transactions that occur in an e-commerce environment, both
from an income tax and consumption tax perspective. It is not
clear how the CRA will use the information gathered as a result of
the new compliance requirements, however, it will likely
provide them with another means of monitoring businesses that earn
a significant portion of their income from e-commerce
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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