Are you involved in the digital economy?
These examples involve individuals who are not performing services as employees of a business or through a corporation.
You probably have tax obligations, since amounts received for business activities conducted through a digital platform may be considered income.
You may also be considered self-employed.
Your obligations
Generally speaking, you have to report your income from the digital economy.
If you are considered self-employed, you must include your business income in your income tax return.
You must also check whether you are required to register for the GST and QST.
For more on your obligations, click Self-Employed Persons or refer to the following:
How to report your income
In 2023, Simon offered a food delivery service using an app. He used his leased vehicle for both food delivery and personal purposes.
For 2023, he earned $50,000 in income from meal delivery. He also received $3,500 in tips. The application also paid him $10,000 in bonuses and incentives. Simon's total business income was $63,500.
In addition, Simon incurred expenses for the operation of his meal delivery business. This includes a cell phone plan costing $100 per month, which he uses 40% for business and 60% for personal use. He also bought a thermal bag for $150 to maintain the temperature of the meals he delivers.
Below are the details of the invoices he kept for tax purposes for 2023.
Expenses related to the use of his vehicle
Expenses | Amount |
---|---|
Leasing fees | $3,600 |
Registration, driver's licence and insurance premiums | $1,300 |
Fuel and charging costs | $7,000 |
Maintenance and repairs | $3,000 |
Total | $14,900 |
Simon keeps a logbook of all trips made with his vehicle (place of departure, destination, reason for the trip and distance traveled). For 2023, the logbook shows that he traveled 21,000 km to make deliveries out of a total of 30,000 km. The percentage of use of his vehicle for his business is 70%.
Below is how Simon should complete Part 4 of form TP-80, Business or Professional Income and Expenses. Click on the question mark for the information you want to see.
Note that if Simon were to own the vehicle used for his delivery business, he could deduct the capital cost allowance expense calculated according to the appropriate class.
The table below shows all of Simon's business income and expenses for 2023.
Income and expenses
Description | Line on form TP-80-V | Amount to enter |
---|---|---|
Total income | 130 | $63,500 |
Expenses | N/A | N/A |
Vehicle expenses (line 318) | 220 | $10,430 |
Supplies (thermal bag) | 226 | $150 |
Multiply telecommunications expenses by the percentage of use for the business ($100 × 12 months × 40%) | 238 | $480 |
Total expenses | 248 | $11,060 |
Net income (or net loss) | 264 | $52,440 |
These examples and tables are provided for information purposes only, as income and expenses may vary depending on the business's activities and the platform used.
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