Section 6 – Businesses
Business or Professional Income
An individual who carries on a business must include the proceeds from all sales, including commissions and professional fees, for which the individual is paid (or is to be paid) in cash or equivalent, or in the form of a barter.
Business income includes amounts and benefits received during the year, such as:
- The value of trips awarded as a bonus or gifts received for work performed by the business;
- Grants and subsidies received from an organization or government;
- The collection of a debt that had been written off as a doubtful account in a previous year;
- Incidental investment income.
For taxation years beginning before March 22, 2017, certain professionals (accountants, dentists, lawyers, notaries, physicians, chiropractors and veterinarians) could elect to exclude work-in-process from income at the end of a year but still deduct in the year all the costs relating to the work. This election is abolished for a taxation year beginning after March 21, 2017. To offset the impact of this change, the professionals in question will be required to progressively include work-in-process in calculating income over a five-year period.
This document is up to date as of September 3, 2020 and reflects the status of legislation, including proposed amendments at this date.