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ARTICLE · 07 APRIL 2014

Meaning Of Carrying On Business In Canada

Miller Thomson
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As a non-resident engaging in activities in Canada, it is important to understand whether your activities will result in income tax being levied.

CanadaTax
Crystal Taylor
Crystal Taylor
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As a non-resident engaging in activities in Canada, it is important to understand whether your activities will result in income tax being levied in Canada.  As general rule, a non-resident is liable to pay Canadian income tax on business income earned in Canada if the non-resident carries on business in Canada.  The threshold question to determine liability for Canadian income tax, therefore, is whether activities will constitute "carrying on business" in Canada.

Carrying on Business in Canada

There is no exclusive definition of the meaning of carrying on business in Canada under the Income Tax Act (Canada).  Therefore, its meaning is derived from the case law. [See discussion below.]

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