1- Operating a business

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.¹

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 webpage 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.

Information Return – Quebec

Taxpayers whose business is registered in the Enterprise Register of Quebec must update the information therein by filing an annual update declaration. If there is a change during the year, a current updating declaration is also required. These obligations may be fulfilled online on the website of the Registraire des entreprises du Québec.²

Under An Act mainly to improve the transparency of enterprises, information on the beneficial owners of a business and the date of birth of each applicable natural person must be disclosed in the register.

¹ For further information, consult the CRA’s Taxes and the platform economy webpage and Revenu Québec’s What Is the Digital Economy? webpage.

² For further information, visit the Registraire des entreprises’s Online Services webpage.