Members of the CATA National Leadership Council have alerted us to an important tax compliance requirement that some may have missed (see below for background details).
New Schedule for the T2 for 2013: Internet Business Activities
The tax return deadlines for businesses are fast approaching (June 30 for corporations with a Dec. 31 year-end and June 16 for unincorporated businesses), and business owners who conduct commercial activities over the Internet have a new tax form to fill out for 2013.
Late last year, Canada Revenue Agency quietly introduced T2 Schedule 88, Internet Business Activities, which has to be filled in by every corporation that earns income from one or more web pages or websites. If your business is unincorporated, you have to provide the information above as part of your 2013 T1 personal tax return filing on Form T2125, Statement of Business or Professional Activities.
A corporation is now required to file the one-page schedule 88, “Internet Business Activities,” with the T2 return if it earns income from one or more web pages or websites. The schedule is applicable to the 2013 and subsequent taxation years, so even taxpayers that have already filed their returns are required to comply. This new schedule was apparently posted on the CRA website in early December, and it is not yet included in the commonly used Taxprep tax return preparation software. While the disclosure requirements of schedule 88 may not be very onerous, depending on a corporation’s specific business use of the Internet, its application is broad, its rationale is uncertain, and its specific disclosure requirements are unclear.
++ Action Item: Please review this briefing document: http://www.ctf.ca/ctfweb/EN/Newsletters/Canadian_Tax_Focus/2014/1/140111.aspx