A business carries on an activity for a profit. This includes a manufacturing or service business, a profession (alone or in partnership), childcare, commission sales (for self-employed individuals), activities in the sharing economy (e.g. ride sharing, accommodation sharing), social media influencers activities, peer-to-peer sales through digital platforms (such as Etsy, eBay or Amazon) and any undertaking that involves a business-type risk.

To determine whether a taxpayer is carrying on a business, it is necessary to verify whether the activity is carried on for a profit or is a personal undertaking. If the activity does not include any personal or recreational element, it is commercial in nature and the expectation of profit is, therefore, clearly established. On the other hand, when the nature of the business includes certain personal or recreational elements, it is necessary to ensure that this income source is exploited in a commercial manner, i.e. with the clear intention of profit. The reasonable expectation of a profit will be determined primarily by the results over a number of years and will be based on the status of the entrepreneur, his/her ability to manage the business, his/her experience and his/her commitment to the business. To the extent that taxpayers are recognized as carrying on a business, they may generally deduct their expenses.

Internet-based Activities

Self-employed workers who earn income from at least one web page or website must disclose information about their Internet activities to the CRA and Revenu Quebec by attaching the prescribed form to their income tax return.