Connolly and McNamara

New tax reporting required for 2013: Internet Business Activities

Canada Revenue Agency (CRA) is now requesting information on a business’ on-line presence and activities. This applies to both incorporated and unincorporated businesses. If this applies to your sole-proprietorship, revised form T2125 must be filed with your 2013 personal tax return.

Excerpt from CRA Guide T4002(E) Rev. 13: Business and Professional Income Guide

Internet Business Activities (page 13) Instructions:

You may earn income from your webpages or websites:

  • By selling goods and/or services on your own page(s) or site(s). You may have a shopping cart and process payment transactions yourself or use a third party service.
  • If your site doesn't support transactions but your customers call, complete and submit a form or email you to make a purchase order, booking, etc.
  • By selling goods and/or services on auction, marketplace or similar sites operated by others.

If you earn income from advertising, income programs or traffic your site generates. This would include:

  • Static advertisements you place on your site for other businesses
  • Affiliate programs
  • Advertising programs such as GoogleAdSense or Microsoft adCentre, or
  • Other types of traffic programs

Enter the number of webpages and websites your business earns income from.

Enter the address(es) of your page(s) and/or site(s) in the fields provided. If you have more than five sites, enter the addresses of those that generate the most internet income.

If you don’t have a website but you have created a profile or other page describing your business on blogs, auction, market place or any other portal or directory site(s), then enter the address(es) of the page(s) if they generate income.

Enter the percentage of income generated from the Internet. If you do not know the exact percentage, provide an estimate.

If this applies to your business, please complete section “Internet business activities” on Page 1 of revised Form T2125, and include this with your tax information that you provide to us. Revised form T2125 must be filed beginning with the 2013 tax year.

If you have any questions, please do not hesitate to contact us at (905) 836-8755.

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