CRA Shareholder Loan Tax Rules in Canada: What Business Owners Need to Know About Subsection 15(2)
Shareholder loan tax rules in Canada remain one of the most common sources of CRA shareholder loan audits and reassessments for owner-managed corporations. When a shareholder withdraws funds from a corporation, the Income Tax Act may treat that amount as taxable income under subsection 15(2) if the loan is not properly structured, documented, and repaid within the required timeframe.
In April 2025, the Canada Revenue Agency released Income Tax Folio S3-F1-C1, Shareholder Loans and Debts, providing updated administrative guidance on how subsection 15(2) shareholder loan rules are applied during a CRA tax audit.
